Home Finance & Investment Could the proposed Fair Rents Bill unintentionally create higher rents?

Could the proposed Fair Rents Bill unintentionally create higher rents?

by Mark Fitt Political Journalist
10th Dec 20 12:22 pm

Higher and more frequent rent rises with landlords forced to recover mandatory costs, was the warning raised by rural business organisation, Scottish Land & Estates, as Scottish Parliament pushes ahead with its plans for the Fair Rents Bill.

In its response to the Call for Evidence on the Bill, which is calling for a rent cap on private rented properties in Scotland, SLE has said that unintended consequences of the Bill could see higher and more frequent rent rises becoming commonplace as landlords try to recoup the costs of improvement works and repairs.

Gavin Mowat, Policy Adviser at Scottish Land & Estates said, “We do not support the call for a rent cap on private rented properties. At the moment the majority of landlords do not tend to increase rents mid tenancy.

“By setting out a formal process in law for rent increases, as this Bill is trying to do, then there is a real danger that landlords will look to impose annual rent increases to the maximum level to offset the future cost of maintenance and repairs. We are also concerned that the generosity we see being shown by many rural landlords who offer rent below market value to help vulnerable tenants will become less frequent as the flexibility to recoup costs in future is removed by these proposals.

“There is already legislation and regulations in place which adequately protect both the tenant and the landlord. The Fair Rents Bill appears to be trying to solve a problem which only exists in some urban areas. It is disappointing that the very different rental picture in rural Scotland has not been considered.”

Andrew Hopetoun, Chair of Historic Houses Scotland, which represents independently owned historic castles, houses and gardens throughout Scotland added, “A rent cap for private rented properties is likely to mean less opportunity for landlords to recover costs of mandatory requirements such as improving energy efficiency, repairs and managing the private water supply.

“For any landlord, these costs can be high, but for historic properties, these costs are often much, much higher and this new legislation will make it almost impossible for landlords of historic homes to recoup the costs. This could result in landlords removing their properties from the private rented sector and this could cause a shortage of rental properties in some rural areas.”

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