There has never been more consensus in Scotland that we need a thriving, vibrant and investable private rented sector (PRS) to help to serve our growing housing needs and boost housing supply, the lack of which has done much to reduce the affordability of housing at all levels.
Scotland’s well-documented housing shortage has led to calls, aired again last week by the Living Rent Campaign, for ministers to introduce a new system of rent controls.
While crude rent controls might superficially appear to be the answer, all of the evidence points to the simple truth that their imposition would have the opposite effect that campaigners desire. If the regulation is wrong the PRS, rather than getting better, would wither and conditions for tenants would worsen.
It is worthwhile looking at the experience of other cities that have sought to use rent control for the very reasons put forward by the Living Rent Campaign.
Stockholm in Sweden has a system where PRS rents are determined by the "utility value" of their property.
Utility value means that the rent should be proportionate to the quality and standard of the fittings and furnishings, a standard that campaigners have suggested should be mirrored in this country because it would encourage landlords to invest more to be able to charge more.
That is the theory, at least. In practice, however, Stockholm’s PRS is a mess, with the number of years it takes to secure a decent rented property in the inner city the defining feature. How would Scottish tenants feel if they walked into a rental agency to ask for a flat in Glasgow, Aberdeen or Edinburgh only to be told by the agent to register and come back in a decade?
In fact, Stockholmers wait 10 to 20 years for a city-centre apartment and around seven or eight in the suburbs.
The city’s local authority now runs an official housing queue with points awarded based on how many days prospective tenants wait. Housing is then allocated depending on how many points the applicant has, combined with an ability to pay for what eventually becomes available.
Naturally, the competition for properties is furious, for the simple reason that Stockholm’s rent control system took a bad housing supply problem and made it much worse.
For many tenants (and campaigners no doubt) this came as a surprise. This was because the Swedish government tried to offer flexibility by limiting rises to those negotiated between the landlord and tenant associations, based on an assessment of housing quality and location.
What actually happened, as was predicted, was that rent controlled properties were no longer worth as much to private landlords who promptly sold them to owner occupiers, removing PRS stock altogether.
Another unintended consequence is that rent controls actually created a "second-hand" security of tenure for a whole underclass of tenants. Those at the bottom of those mammoth housing lists are simply forced to sub-let from those lucky enough to have the golden ticket of a prime, regulated tenancy that they no longer need by dint of moving elsewhere.
All this is not to say that Scotland’s PRS can’t be improved further; it can. It’s just that the main problems we face – lack of supply failing to keep up with rocketing demand for PRS accommodation – will not be addressed by importing parts of rent control policies from elsewhere, that have patently failed to benefit tenants and reduce waiting lists.
Scotland needs to encourage investment, and without doubt more can be done to build more properties for PRS in areas where they are needed, while encouraging investors of all types to look at appropriate models of tenure that deliver the stability that tenants and landlords want.
It’s time we took a joined-up, evidence-based approach to improving the PRS before we end up with our own version of a most unwanted Stockholm Syndrome.
Dan Cookson is head of research, Lettingweb for PRS 4 Scotland.
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