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Responsible landlords have ‘nothing to fear’ from rent cap, Scotland’s tenants minister insists
Responsible landlords have “nothing to fear” from Scotland’s rent cap, the minister for tenants’ rights has said.
Patrick Harvie defended his emergency cost of living legislation in front of the property industry during a panel at the Scottish Property Federation conference in Glasgow on Wednesday.
The minister for zero-carbon buildings, active travel and tenants’ rights said: “A well-regulated private rented sector is good both for tenants and for responsible landlords, who are proud of providing good-quality housing at a fair price.
“It may be challenging to those who simply want to gouge tenants, and sadly we know that there are private rented sector landlords out there like that. Responsible landlords have nothing to fear from this change.”
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Mr Harvie was challenged by Gillian McLees, director of build-to-rent at Rettie & Co and Scottish chair of the UK Apartment Association, who said the rent cap meant she was unable to reassure potential tenants.
“I’ve recently had to start offering staff counselling because of the horror stories and the detrimental effect that it’s having on them when you’re receiving thousands of calls of people trying to find homes that they just can’t get,” she said.
“Everything that we hoped was going to deliver those new homes, all of our pipeline, all of our planning with regards to all types of tenure, whether it be mid-market rent or social housing, have all just stopped right now. So I can’t even give hope to people and say… ‘we’ll get you a home’. It’s just been devastating.”
A study by the Scottish Property Federation released on Monday claimed that the legislation had spooked institutional investors from Scotland’s fledgling build-to-rent market, with some viewing the country as “uninvestable” under current conditions.
Mr Harvie retorted that the impact of the rent cap on investment decisions was an issue “principally of perception”.
“This is legislation that can only, at maximum, last 18 months,” he said.
However, he reiterated that the coalition government was committed to introducing a permanent system of rent controls in Scotland by 2025.
Mr Harvie added: “The evidence from around Europe can show that regulated markets can also be attractive to institutional investors.
“This direction of travel may be a departure from the UK norm, but it actually brings us closer to the European norm.”
He said that changing the rent freeze to a 3% cap at the start of this month demonstrated the “balanced approach” the government is taking to regulation.
Mr Harvie also suggested that the forthcoming housing bill would include a legal definition of mid-market rental homes, which allow the Scottish government to deliver more affordable accommodation with less grant funding.
The bill will be introduced to the Scottish parliament after the summer recess.
