Question reference: S6W-18297
- Asked by: Jamie Greene, MSP for West Scotland, Scottish Conservative and Unionist Party
- Date lodged: 24 May 2023
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Current status: Answered by Patrick Harvie on 12 June 2023
Question
To ask the Scottish Government what its assessment is of comments from the director of the Scottish Property Federation, reported on 18 May 2023, that the impact of emergency legislation on the build to rent sector has led investors to “view Scotland as a risk, compared with more stable locations in other parts of the UK”, and what its position is on whether this perceived risk will further limit the supply of rental accommodation.
Answer
As the cost of living crisis continues, the emergency Act aims to give important support to tenants, and to provide them with much-needed stability in their housing costs and additional eviction protections. It has gone further than anywhere else in the UK in helping protect tenants across the rental sector.
Since devolution, there has been significant overall growth in the privately-rented sector, through a period of increasing regulation and market intervention, and we consider that healthy markets, responsible landlords and public sector intervention can co-exist.
As last year’s Cross Party Group on Housing report on Rent Control acknowledged, regulated markets can be attractive to institutional investors. We also note that in the publication by the British Property Federation, assessing the impact of the emergency Cost of Living (Tenant Protection) (Scotland) Act 2022, it is recognised that rent control is not seen as a reason not to invest if part of a stable policy environment.
We take a close interest in the way policy in Scotland interacts with the rest of the UK, noting the Royal Institution Of Chartered Surveyors comments of 8 June 2023 that “interest rate rises are also impacting the rental sector and combined with looming reforms proposed in the [UK] government’s Renters (Reform) Bill, landlords are increasingly deciding to leave the sector and sell up property, causing further constraints to lettings supply.” We also note the intention of the Welsh Government to consider forms of rent regulation.
By its nature, the emergency Cost of Living Act is time-limited and the rent cap and eviction protections cannot be extended beyond March 2024. The temporary rent cap provisions apply only to in-tenancy rent increases, with rent setting for new housing supply continuing to be set by the market.
We will continue to listen to feedback and engage with stakeholders, monitor the data and consider whether the legislation remains proportionate and necessary.