A discussion paper on rent regulations is suggesting that Build-To-Rent operators could be excluded from the potential rent limits that might affect buy-to-let landlords.
In a consultation by the Scottish Government, the idea is to apply rent controls to rent increases that occur within a tenancy and when setting rent for new tenants. The government is also exploring the possibility of permitting rent increases that exceed the rent limit in specific situations.
The Scottish Government recognizes that some landlords choose not to raise rents during a tenancy but prefer to do so between tenancies. If rent controls apply in both cases, landlords might opt to increase rents during tenancies, which they wouldn’t have done otherwise.
However, there’s a suggestion in the consultation that the Scottish government is thinking about exempting institutional Build-To-Rent providers from rent controls. They acknowledge that some investors may view rent control as discouraging investment.
This could be in response to publicized comments by certain Build-To-Rent operators stating their reduced interest in Scottish developments due to the rent controls in place for the past year.
At least one property expert has criticized the Scottish Government consultation as being unfair to buy-to-let landlords.
Neil Cobbold, the managing director of automated rental payment company PayProp UK, has criticized the idea of a Build-To-Rent exemption as fundamentally unfair.
Cobbold has also voiced his disapproval of other suggestions from the Scottish Government, which were included in their recent consultation document released quietly two weeks ago.
Apart from long-term rent controls, the government also proposes allowing pets in rental properties, tenant modifications to properties, stronger eviction protections, alternative uses for unclaimed deposits, and various measures for the social rented sector.
Cobbold remarks, “This consultation, although addressing some important issues in the Scottish rental sector, is not well-suited for its purpose. It essentially limits respondents’ choices, pushing them towards adopting one of the predefined options, even if they have reservations or alternative suggestions. It’s a restrictive approach that doesn’t fully account for the complexity of the issues at hand.”
There’s ongoing consideration of additional long-term eviction safeguards, such as potential winter eviction delays or when it might cause financial difficulties for tenants. However, the consultation also suggests that a tribunal should assess whether a delay would negatively impact the landlord’s health, long-term disability, or financial situation.
Additionally, the consultation seeks input on various other matters, including the possibility of transforming all remaining assured and short assured tenancies into open-ended private residential tenancies.
Respondents are also asked to weigh in on whether tenants should have the freedom to personalize their rented space with painting and decorating or to have pets, as well as what should be done with unclaimed tenancy deposits.
Interested parties have until October 27 to provide feedback to the Scottish government’s consultation.
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