Rent Changes 'Would Make Housing Shortage Worse'

Plans to control rent and make it harder to evict tenants could "scare away" property investors.

The Scottish Property Federation is warning the Scottish government that intervening could deter private funding, and make the housing shortage worse.

Current proposals suggest removing the 'no fault' ground for repossession, which will mean that landlords can no longer reclaim their property at the end of a tenancy, and the introduction of rent controls.

David Melhuish, director of the Scottish Property Federation, said a large-scale, professionally managed private rented sector would play an "important part" in easing the current housing shortage.

He said: "Scotland’s build to rent sector is in its early days, and we need to do everything we can to encourage institutional investment and large scale build-to-rent housing development, not scare it away. While we are supportive of a new, streamlined tenancy regime, it is crucial that it is not done at the expense of investor confidence.”
 
Hazel Sharp, Director of Allsop Residential Investment Management (ARIM) and Chair of the SPF Residential Investment and Management Committee, said: “There are more opportunities in England than there is capital to invest, by a considerable margin.  Our investor clients tell us that they would struggle to make a compelling case to invest in Scotland whilst the government still believes that rent control is the answer to a problem which is a lack of supply. 
 
"Unless Scotland is positively differentiated prospective investors will withdraw any interest in Scotland, and we will be left with fewer homes for rent, lower standards, less choice and consequently higher rents.  This would be disastrous for the private rented sector and its tenants, exacerbate the crisis in housing supply, and damage the wider Scottish economy."