Marcus Di Rollo: Still more questions than answers for private landlords

Marcus Di Rollo: Still more questions than answers for private landlords

Marcus Di Rollo

The Scottish Government’s recent changes to the emergency rent freeze legislation have improved the position of private landlords but have also caused an imbalance in the rental market and raised questions about the government’s long-term vision for the sector, writes Marcus Di Rollo.

Private landlords would have breathed a sigh of relief after the most recent changes to the Scottish Government’s emergency rent freeze legislation announced at Holyrood. Yet, while it is clearly a step in the right direction, only time will tell if goes far enough to undo the damage and encourage investor confidence to return.

The interventions were put in place to protect tenants during the cost-of-living crisis and, while this was certainly the case for many in long-term agreements, it had the opposite effect for newcomers looking for a place to live. Since October, when the rent freeze and evictions ban first came into play, there have been 29% fewer properties available on the rental market, serving as homes for people who – for a myriad of reasons – cannot or do not want to buy.



In reality, the legislation has caused an even larger imbalance between supply and demand. In city centres especially, properties are still receiving high numbers of applications while the pool of available homes continues to shrink. This is having an adverse effect on prices for new tenants, driving up monthly rents on new leases.

Regardless of the wider economic situation, there will still be tenants giving notice and moving out. In response to demand, it is at that point where the rental price could go up. Or, indeed, it might be the catalyst for some to reconsider their investment and put the property up for sale. All that does is further limit the rental property supply.

We can now see that private landlords are in a better position than they were before, which is encouraging. Rent freezes have been replaced instead with a 3% yearly cap on increases, or 6% in exceptional circumstances. But the ban on eviction continues until at least September. If you are left in a situation with a non-paying tenant and the issue cannot be resolved, that would surely discourage you from remaining in the market.

Perhaps the answer to the ongoing housing crisis is greater communication. To encourage more activity, it would no doubt help if investors had an idea of the Scottish Government’s long-term vision and plan for the sector. At the moment, it is a bit of a guessing game. Questions still remain and inevitably this will have a knock-on effect for the people who call these properties home.

Combined with this, we are also awaiting news on the changes to minimum Energy Performance Certificate (EPC) ratings for rented property, which could mean landlords left with hefty retrofit bills. Most of the tenements on the market will need a considerable amount of work to upgrade windows and insulation, and given the current economic situation, that could in fact mean more properties going up for sale instead.

Property is a long-term investment but the way things stand, even the short-term outlook is murky. In reality, any form of restrictions on landlords is unlikely to go far enough to free up the housing that Scotland so desperately needs. Meanwhile, the private rental market continues to provide essential options for people who cannot afford to – or may not want to – commit to buying a home of their own.

Marcus DiRollo is lettings director at full-service legal firm Gilson Gray

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