It’s being reported that there is going to be a rent freeze in Scotland.
I listened to the Committee proceedings for the White Paper yesterday.
Question – What is meant by “Unjustified” rent increases?
Answers made it sound like it could be any rent increase which makes the rent “unaffordable” – there was talk of there being a new rule whereby if rent exceeds a set percentage of the tenant’s income it can’t be charged. They said it would be like “fuel poverty” (when fuel costs exceed 10% of a tenant’s income) – no figure mentioned but you get the idea.
In other words – rent controls.
Rent controls + the end of s21 = a recipe for utter disaster for landlords. It would take us straight back to the old Rent Act days when only a lunatic bought a house with vacant possession and rented it to a tenant.
There is supposed to be a provision for landlords to regain possession if they want to sell the property but everyone seemed to be against that “loophole” because they said landlords would just swap properties between different companies. That is nonsense because stamp duty kills that idea, but I don’t believe it will stop the government removing the “loophole”. If I’m right we will not have any ability to regain possession when the Act eventually passes, unless the tenant is months behind with the rent and has trashed the property. Even then you can’t rule out the new Ombudsman favouring the tenant and letting them stay.
All very depressing. It’s not even good news for tenants because the supply of accommodation will shrink even further if we go on like this.
I saw yesterday there was a petition that had been started on Change.org calling for the Government to implement a price cap on rents, in line with the maximum rent allowance for the relevant LA.
It was then stated that this would help Landlords with repairs and with keeping a tenant long term.
Not sure how it helps with repairs but that was what the petition organisers advised!
Yes, that is very depressing, although some of those suggestions sound barking mad and I wouldn’t have thought that the committee would seriously entertain them. There is a very obvious consequence for poorer tenants if the landlord can only charge a percentage of any tenants income.
One area of concern is that NRLA is still saying they see no problem with the end of s21 despite the fact that most landlords seem to be saying the opposite.
That is a useless NRLA only now interested in profit for themselves and selling services .There is not a chance they will listen to us
agree with you all. NRLA is only concerned with selling. Guess what, Oxford Council has set selective licensing for all landlords and need to be a member of such an organisation, so I pay up. Can we all not do a petition against a rent freezer/rent cap?As such it is getting too stressful with tenants treating properties like a hotel and leave huge expenses to sort after they leave. If Truss announces reduced capital gains, I am selling up, may be commercial property is the way to go now.
The NRLA representative at the Committee hearing made the point that supply is reducing but on the whole I thought he came across very poorly. He certainly didn’t mount a coherent attack on the proposed banning of “unjustified” rent increases.
I spent yesterday afternoon with a couple who had a portfolio of buy to lets and are now down to their last two. I mentioned that Scotland had introduced a rent freeze - they hadn’t heard of that. When I told them they said instantly, ‘That’s it, we’re getting out right now’.
If rent freeze come in I will exit with VP. If I think it will come in and S 21 has been abolished I will exit earlier and turf out a double digit number of households.
Me too, rent cap and no s21 makes letting unviable for me, will sell when current tenancies end
how about short let? risks are less. popular cities, prime location high demand. Also hmo
my portfolio is geared to long lets . Short won’t work.
Rent freeze or Rent Cap, if a freeze all tenants will be happy, if its a cap I am sure I will be able to put all my cheap rents up if I want.
So which is it going to be
Short lets probably won’t work either because there was a lot of talk at the Committee hearing from the local authority representatives about the need for a complete reform of the sector to counter the effect of long-term lets being replaced by short term Air BnBs etc., especially (but not only) in “hotspots”. There was an unmistakeable atmosphere of anti-PRS feeling, which I would sum up as being ‘If it benefits private landlords, it’s automatically a bad thing.’
Also the government is “consulting” now on new controls over the short-term letting business, under the “tourism” heading, but clearly will affect all short-term lets, not just holiday lets:- Developing a tourist accommodation registration scheme in England: call for evidence - GOV.UK
@Leslie1 - It’s a Freeze in Scotland.
Old adage: There is nothing so permanent as a temporary government measure.
tourist registration scheme will come into force. Most Hotspot councils are already gearing up for it. Most likely with annual licensing charges. In her tenure Truss might cause more cause for concern.
They should put a mortgage freeze as well but of course they wont. The only come after us evil landlords
Buy to let now have over 3.5%interest,savings rates are better now around 3%,makes sense to not opt for new mortgages.
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