How SNP’s betrayal of renters will see buy-to-let investors outbid first-time buyers

With the ending of the cap on rent rises, landlords are set to impose increases that could drive renters into poverty and also affect the housing market

This week, the Scottish Government scrapped the last of the emergency measures introduced in the aftermath of Covid to protect Scotland’s tenants. Until March 31, rent increases were in effect capped at 12 per cent. But now? Landlords can increase rent as much as they like and many are already planning large rent hikes to make up for lost time.

Nearly a year ago, the Scottish Government declared a “housing emergency”. You’d be forgiven for asking what the point was, given their choices now.

The cap was by no means perfect. It was too complicated and difficult for tenants to challenge rent increases above the limit. Many tenants were evicted after challenging their rent increases and loopholes meant it was too easy for landlords to avoid the 12 per cent cap altogether. Nevertheless, given the scale of Scotland’s housing emergency, these protections were a vital check on landlords’ ability to drive tenants deeper into poverty.

Scotland needs more affordable homes to rent and buy (Picture: Cate Gillon) | Getty Images

Inflation-busting rent rises

The Scottish Government has committed to introducing permanent rent controls through the Housing Bill. This bill would bring us in line with most other European countries, and would bring back the rent controls that we had in Scotland for 70 years before Margaret Thatcher scrapped them.

But rent controls are still years away – and landlord lobbyists are pushing hard to water down any new protections for tenants. It is unclear what the government expects tenants to do until then.

Rent increases are now completely uncapped, and new protections are still far off. Landlords, who know that rent controls are coming, will be hedging their bets with inflation-busting increases at every chance they get. Make no mistake, this will mean more tenants will struggle to stay in their homes.

And eye-watering rents don’t just drive tenants into poverty and to the brink of homelessness, the cost also falls on the taxpayer. We spend billions subsidising the mortgages of private landlords.

The cost to local authorities when someone is driven out of their home and into emergency accommodation is astronomical, with many local authorities now failing to fulfil their statutory duties regarding homelessness.

A threat to the entire economy

First-time buyers have little hope of outbidding buy-to-let investors. Businesses struggle to recruit staff who can’t afford rent on the wages offered, something which is particularly true in rural areas. And city-centre communities face becoming entirely shop fronts as people move further and further out to make ends meet.

You do not need any special economic expertise to understand that if housing costs continue to spiral out of control, while wages continue to flatline, we are setting ourselves up for a crisis that will threaten the entire economy.

People can see the effect of the housing crisis all around them. So it’s no wonder that rent controls are so popular. Poll after poll show an overwhelming majority, whether they rent or not, support capping rents.

One recent YouGov poll showed 82 per cent of Scots were in favour. And 61 per cent of Conservative voters also backed the measures. In an era of bitter polarisation, there are vanishingly few policies with such deep and broad support.

High-quality, affordable homes

Despite this, our government decided to end emergency protections. This irresponsible decision calls into question their whole commitment to seriously tackling the housing crisis.

Housing minister Paul McLennan seems to be rolling over to attract private investment. His concern with investment supposes that the housing emergency is simply an issue of supply and demand. If we could just convince developers to build more homes, this will solve the crisis.

But this fix does not hold up under scrutiny. The cost of building a new home – between inflation, credit, labour, and supply costs – is the highest it has been in decades. The idea that there is an army of developers out there just desperate to build high-quality, affordable homes, in the communities that need them most is just not true.

“Build more – now” is code for purpose-built student housing and build-to-rent, neither of which are the types of homes that tenants can afford or need.

Proper rent controls needed

Time and time again, new-build developments create totally unaffordable homes and cost-cutting means that people often end up stuck with nightmare situations of disrepair. We absolutely do need more homes – but the homes we need are truly affordable, social housing units and not the kind of private, build-to-rent developments that the Scottish Government has put all its hopes in.

But more to the point: building homes takes time. The housing crisis is now. Even if the Scottish Government found the money to build the homes that we need, at the scale we need them, we’re looking at decades before these new homes have any impact on rent and house prices. Tenants simply cannot wait that long.

After this week’s betrayal of tenants, the upcoming Housing Bill has never been more important. Proper rent controls could transform Scotland’s housing forever – and undo the damage done by the Scottish Government’s delays and inaction. But if the Scottish Government buckles to the pressure from landlords, then this Housing Bill could end up being little more than just empty words on paper.

The SNP need to take bold steps to tackle Scotland’s housing crisis. They need to stand up to the landlord interests who are focused on making eye-watering profits. But most of all, they need to demonstrate how they will reverse the harm that sky-high rents have caused tenants and our communities.

With a Holyrood election approaching, they will need to answer that question fast. And tenants will be watching closely.

Aditi Jehangir is chair of national tenants’ union Living Rent