SNP 'legislative burden' blamed for shrinking rental sector

The research by Dr Andrew Watson, of the University of Glasgow-led UK Collaborative Centre for Housing Evidence, was funded by Argyll and Bute Council and Citizens Advice Scotland to "better understand the composition of rural landlords in Argyll and Bute, to identify the extent to which they differ in key measures from non-rural landlords, to explore the specific investment challenges they face, and to quantify their future investment intentions".

The extent of the problem in the housing emergency authority that is also Scotland’s second largest council area behind Highland is shown with 3,284 registered Scottish Private Rental Sector landlords in December 2023, against 4,520 in 2020.

The research found a third are considering selling and the majority of those pointed to the legislative burden.

On the tenant’s side, demand outstrips supply so that "every time a property becomes available there’s almost a feeding frenzy, with dozens and dozens of people looking to move".

The sector has been "subject to an increasing legislative burden via planned steady state policy interventions".

The report continues: "However, as a result of a variety of socio-economic and geo-political drivers including the global pandemic and the cost-of-living crisis, legislation has also been driven by crisis-based policy interventions such as the ‘eviction ban’ and rent cap.

"Despite this, the pace of legislative change appears to be increasing.

"The Housing (Scotland) Bill, was introduced to Parliament in March of this year and the ‘Proposals for a Heat in Buildings Bill’ consultation ended in the same month."

It adds: "Landlord business costs, including repair and maintenance, compliance, and insurance costs have increased dramatically."

The paper also said: "When asked about the specific reasons for deciding to sell some or all of their SPRS properties, the majority of landlords (65% of cases) selected the cumulative impact of legislation as a factor in their decision to sell."

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The paper continued: "Moving forward, to undergird existing tenancies, there is an urgent need to encourage disenchanted landlords to remain in the sector or indeed convince them to invest further, assuming of course that either is a desirable outcome for policymakers.

"The recommendations for the Scottish Government are broad, spanning strategic matters relating to the size and shape of the sector, and practical matters such as the need for improved SPRS data.

"However, the recommendations prioritise resetting the relationship between policymakers and landlords via engagement and communication.

"The recommendations for Argyll and Bute Council also include measures to improve communication and engagement. However, practical solutions for improving enforcement are also included.

"The recommendations for Citizens Advice Scotland focus on the need for the provision of better information for landlords and an increase in research outputs, which will enable data driven insights and support policy debates."

As First Minister John Swinney unveiled the pro-rent cap Programme for Government this week, Sarah-Jane Laing, chief executive of Scottish Land & Estates, a membership organisation for landowners, rural businesses and professionals, said that "with the Scottish Government now seeking to move forward with rent caps, it needs to fully understand the further detrimental consequences this could have on rural rental provision".

A spokesperson for Argyll and Bute Council said: "We are committed to addressing the housing emergency and alleviating the current housing shortage facing residents in Argyll and Bute, and we are already taking a number of steps to do this. Last year, we became the first local authority to declare a housing emergency and, shortly afterwards, we hosted a Housing Emergency Summit with over 90 key stakeholders to identify and prioritise a range of actions and potential solutions.

"We created a Housing Summit Action Plan and as part of that we commissioned a report to gain a better understanding of some of the issues facing rural landlords. We will now take the recommendations and, together with the Scottish Government and Citizens Advice Scotland, we will work in partnership with landlords to look at how we can improve the private rented sector in Argyll and Bute." Citizens Advice Scotland declined to add to the council comment.

Paul McLennan, Scottish Housing Minister told this column: "A fairer, well-managed private rented sector is in the interest of both tenants and responsible landlords. Our Housing Bill includes a package of important reforms to the rented sector, and we will continue to work with tenants, landlords and investors to ensure the measures in the Bill will support our vision for improving the supply and affordability of high-quality rented housing in Scotland.

"We continue to engage with stakeholders on our proposals for rent controls as the legislation goes through the parliamentary process. The introduction of a rent control system is not incompatible with encouraging investment."