Rent freeze and eviction ban may not achieve their intended purpose - Marcus DiRollo

After fast-tracking the emergency legislation through parliament earlier in October, the Scottish Government has introduced a freeze on rents for private and social tenants. With that, there is also a ban on evictions, unless under certain circumstances, until at least 31 March 2023.

In the current cost-of-living crisis, few people could object to either measure on the grounds that they aim to support those who need it most. However, whether they actually achieve their intended purpose is a moot point, as many property industry experts have already pointed out.

The main question about the effectiveness of this new legislation has to be whether the changes will help mitigate the rising cost of living. Given much of what is currently driving inflation is increases to the cost of utilities, petrol, and day-to-day goods, it seems unlikely these measures will make a meaningful difference.

Hide Ad
Hide Ad

On the other side of the equation are landlords – in some cases, that may refer to someone who has rented their property with utility bills included in the monthly rental price. They will have to shoulder the weight of all the rising costs we have read so much about in recent months, with no ability to evenly share the burden of skyrocketing energy bills or their mortgage payments.

Marcus DiRollo is lettings director at Gilson GrayMarcus DiRollo is lettings director at Gilson Gray
Marcus DiRollo is lettings director at Gilson Gray

If a tenant refuses to pay their rent, for whatever reason, resolving the situation is likely to be a protracted process. Currently, a tribunal against a tenant cannot be initiated until they are in at least three months’ arrears. The Scottish Government’s new legislation will see this double, extending the minimum to six months.

In reality, this is likely to take longer. Landlords could, in fact, be looking at up to eight months before any kind of resolution is achieved, all the while they are receiving no income from their properties and rising costs.

Combined with the new regime for short-term lets that has come into effect, it’s clear there is a concerted attempt to move more properties from short-term lettings to the long-term letting or sales market.

While the principle is fine in theory, it fails to solve the issue of Scotland’s ‘chronic’ – according to Homes for Scotland – undersupply of new homes. Indeed, earlier this year research from Admiral pointed towards Scotland having the worst ratio of renters to rentals in the UK, with 412 people looking for every 100 rooms.

Clearly, there is a problem to solve when it comes to the provision of housing in Scotland. But, the new legislation may only serve to reshape the property market to a point where it is less attractive as a destination for investment – particularly compared to strong markets in England.

Although some landlords may decide to sell, house prices are still likely to remain too high for many people to take that initial step onto the property ladder. Many of the properties that could become available as a result of recent government interventions in the property market will not be suitable for first or even second-time buyers.

Rather than solve the underlying mismatch between the supply and demand of homes – particularly for those at the bottom of the housing ladder – the Scottish Government’s legislation merely kicks the can further down the street, punishing private landlords in the process.

Marcus DiRollo is lettings director at Gilson Gray