Six ways to alleviate property rental shortage - David Alexander

With the economy recovering and students returning to university, demand for rented accommodation – at the start of the year, moribund – has undergone a substantial increase in just a few months, leaving many seekers disappointed.

David Alexander is managing director of DJ Alexander

This is down to unique circumstances rather than deliberate policy and there are no easy answers. But six points, if acted upon, could not only alleviate the current situation but bring long-lasting improvements to residential letting with benefits for all. They are listed here, though not necessarily in order of importance.

Stop demonising landlords. Too often, a misunderstanding of modern landlordism will skew the thinking of some politicians and others with influence. Yes, just as every barrel has a few bad apples so there are some landlords who will exploit tenants for their own benefit. However the vast majority are responsible business people – providing a product and service at what the market has deemed to be a fair price. In that they are no different from any small shop-keeper who manages to trade without controversy or political interference. Too often the word “landlord” is linked to medieval times when most ordinary folk were tied to the local laird. In reality, today’s landlord is more likely to be a postal worker nearing retirement than a peer of the realm.

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Co-operate with the sector. To be fair, the Scottish Government has shown willingness to listen to landlords and letting agents but too often their submissions are then pigeon-holed. Much better that Holyrood gave more credence to the key role played by the private rental sector in providing the country with a balanced housing portfolio, and rather than just listen,, call on its experience to deal with matters of mutual concern.

A moratorium on rent controls. On the back burner since the start of the pandemic, as the economy recovers, the issue may be revived, especially given the SNP’s new “social compact” with the Scottish Greens. For a possible outcome let’s look to history. Rent controls were – for understandable reasons – introduced during World War One. When controls were abolished under Margaret Thatcher in 1989, the number of private rents had reduced from 90 per cent of UK households to 10pc over the intervening 60 years. Clearly much of that reduction would have been due to tenants switching from private to municipal rentals but with good council homes in such scarcity there is not this option today. Rent controls will undoubtedly reduce the level of private stock, which will benefit owner-occupiers but not those who are unable to afford to buy. In other words, be careful what you wish for.

Accelerate the disputes process. The “Chamber” which adjudicates on landlord/tenant disputes on various issues, in particular unpaid rent and repossessions, is a good idea in principle but already overburdened with cases before the pandemic, decisions are taking longer than ever. While not directly resulting in more unoccupied rental properties, it does mean that unscrupulous tenants are able to abuse the process and live rent-free for extended periods – when the property they occupy could be let to any number of decent people in need of rented accommodation.

Restrict the number of holiday lets. I am, in principle, against political interference in most types of business so this might seem contradictory given my views on rent controls. But the accommodation requirements of the permanent population are, perhaps, more important than tourism and all the evidence points to rents rising (pre-pandemic) as a result of substantial numbers of conventional landlords switching to leisure lettings. Also, Edinburgh residents are surely being reasonable in not wanting the character of their streets and closes changed as a result of this trend – something already recognised by the authorities in Paris, Berlin and Barcelona.

Build more council houses. Although a longer-term aim this is key to maintaining the balanced residential portfolio, to which I referred at the start of this article. There are many hard-working families on low or relatively-low incomes unable to afford to buy and for whom renting privately is something of a struggle; in their case “economic rents” are the only viable option. But that is best achieved by increasing the municipal stock rather than squeezing private landlords.

David Alexander is managing director of DJ Alexander