8 Oct 2015
Policy area: Residential Investment/Management
Today’s wide-ranging reforms to the private residential tenancy regime in Scotland will be tested in time on their ability to support the much-needed new investment and homes required for this fast-growing sector, the Scottish Property Federation (SPF) has said.
The Scottish Government today introduced the Private Housing (Tenancies) (Scotland) Bill, inlcuding clauses that would allow rent controls to be introduced within ‘Rent Pressured Zones’ (RPZs), which will be defined by the Government as either the whole or a part of a local authority area.
The SPF welcomed modernisation of the overly-complex tenancy regime, but expressed concern at the failure to effectively support investment in new student accommodation blocks, which are developed with specific planning permission and therefore do not have the flexibility of other landlords in relation to their choice of tenant.
John Hamilton, Chairman of the SPF, said: “Large-scale Build to Rent investment offers the opportunity to deliver new homes to the market relatively quickly, but we need to secure a critical mass of investment to make this potential market a reality. If we fail to attract significant levels of new build then we will have missed an opportunity to offer home-seekers choice and to ease the pressure on rents and house prices in the Scottish residential property market.
“We fully support measures already underway to raise management standards in the existing sector, and are also pleased to see some commitments from investors coming forward for the new Build to Rent sector to add vitally needed new homes and choice of tenure to Scottish home-seekers. The test of the legislation will therefore be whether or not it sustains and builds on the exciting new PRS projects that are beginning to emerge in Scotland. Without a significant new supply of homes we foresee only added upwards pressure on rents and on social housing waiting lists, which would be the opposite outcome to the Government’s intentions.”
Tenancies in RPZs would be subject to a minimum rent increase cap of CPI plus 1% annually, for a maximum of five years. There will be discretion for Ministers to set a higher cap depending on their assessment of the local rental market. Landlords may also appeal for a higher cap if they can prove they need high rents for necessary property improvements.