November 3, 2023 8:53 am

Insert Lead Generation
Nikka Sulton

Scotland’s Court of Session supports Scottish Government on Rent Controls. The Scottish Association of Landlords, Propertymark, and the Scottish Land & Estates body had challenged the Scottish Government’s rent controls. They sought a Judicial Review concerning the Cost of Living (Tenant Protection) (Scotland) Act 2022, which included these rent controls.

The court’s ruling has sided with the government, determining that the legislation is not in violation of the law and does not infringe upon landlords’ rights under the European Convention on Human Rights. The central point of the judgment underscores that the authority to determine what circumstances warrant ’emergency legislation’ and what constitutes a ‘proportionate response’ to such emergencies rests with the parliament, not the courts.

The Scottish Association of Landlords (SAL) expresses its disappointment with the court’s decision but takes pride in its efforts to advocate for and safeguard the rights of those involved in providing private rental housing. SAL’s statement notes that while the court recognized the merit of their petition and allowed the case to proceed, the final outcome is still disappointing. Nevertheless, by pursuing this matter in the Court of Session, the government may now reconsider introducing disproportionate legislation without prior consultation. This decision’s potential impact is a matter of concern, as it could worsen the housing crisis in Scotland, potentially leading more landlords to divest their properties, thereby decreasing the available rental housing stock in the region.

Propertymark strongly criticizes the recent court decision, viewing it as a significant setback for the Scottish private rental sector. The ruling now grants the Scottish Government the authority to put into effect a policy that Propertymark considers inherently flawed.

According to Propertymark, the government’s approach to rent control in Scotland has not yielded any noticeable benefits. Instead, rental prices continue their upward march, registering a substantial 13.7 percent annual increase as of Q3 2023. This surge has driven average monthly rents in the region to approximately £1115. The persistently rising rents have been a source of concern, as they place additional financial burdens on tenants and make the housing market more challenging for both landlords and renters.

Propertymark’s contention is that the rent control policy fails to address the root causes of affordability issues and housing shortages in Scotland. Rather than alleviating the situation, it appears to exacerbate the problem. This concern has raised questions about the effectiveness of such measures and their potential impact on the rental market’s dynamics. The organization advocates for a more comprehensive and nuanced approach to housing policy, one that considers the diverse needs and circumstances of both landlords and tenants.

Numerous landlords have raised substantial worries about the possibility of them being compelled to leave the rental sector. However, the precise scale of any exodus remains uncertain until the release of the upcoming full Scottish Housing Survey, which was scaled back due to the COVID-19 pandemic.

Nathan Emerson, CEO of Propertymark, highlights the vital role played by the private rental sector in providing housing. He emphasizes the sector’s disappointment due to what’s perceived as a significant lack of comprehension, which is pushing reputable landlords to exit the private rental market. The economics of delivering high-quality residences are appearing increasingly unworkable.

The concerns within the private rental sector are growing as landlords fear that the current policies are not only insufficient but also potentially detrimental to both tenants and property providers. The forthcoming Scottish Housing Survey will shed more light on the ongoing situation and its implications for housing in Scotland.

“Private landlords currently commit to providing homes on a huge scale across Scotland and they must be assured that they can cover all costs. When developing policies that directly affect the private rented sector it’s vital that ministers fully understand the investment economics that sit behind the supply of high-quality homes to rent. Ministers must ensure housing policies include wide ranging impact assessments to ensure the system is fully workable for landlords, tenants, and agents alike.”



Read more Property Investing News HERE

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}