Rent Freeze to Impact Tenants More Negatively Than Landlords, Says Agent

Scottish estate agent, DJ Alexander, has reacted with concern at the government’s emergency legislation to introduce a rent freeze and a moratorium on evictions.
The letting agency says the rent freeze legislation will hurt tenants more than landlords, despite claims to the contrary by the Scottish minister for Zero Carbon Buildings, Active Travel and Tenants’ Rights, Patrick Harvie.

Harvie’s view that tenants will be protected by freezing rents is not borne out by reality or by the concerns of many organisations protesting against this policy.

While Harvie calls these “vested interests” they include housing associations, Scottish land and estates, universities, construction companies, build to rent investments, landlord organisations, letting agents and individual and corporate landlords. There have already been cancelled investments from housing associations who believe their stock levels will fall and investment in large scale developments has already been put on hold.

Labour peer Lord Willie Haughey, who had plans to invest £1bn in 11,000 affordable homes to rent in Glasgow, has recently shelved his development stating: ‘Patrick Harvie’s rent freeze is a big part of my decision. The housing market is in absolute crisis and without any plans on how to address it, that crisis can only get worse.’

Lord Haughey continued: ‘Patrick Harvie will go down in history as the man who stopped investment and added to the calamitous lack of housing that we have in Scotland, 100 percent.’

David Alexander, chief executive of DJ Alexander, said: ‘Mr Harvie stated at the weekend that he had received messages from constituents who stated that they had experienced increases of 10, 20, and 30% on rentals. Either Mr Harvie doesn’t understand the Scottish rental system, or he is being disingenuous. All rent increases are subject to appeal and no tribunal in Scotland would ever approve increases of this scale so either the tribunals aren’t doing their job correctly or Mr Harvie needs to produce proof of such increases.’

‘With tens of thousands of viewing requests coming into our system monthly, students being asked to sleep on the floors of common rooms, and waiting lists at record levels, demand has never been greater.’

Alexander continued: ‘But this is not a new problem and has been building for years. The growth of the private rented sector in Scotland has increased at almost the same percentage as the decline in social housing stock. In December 2000 29.9% of Scots lived in social housing with just 6.7% in the private rented sector. By 2019 (the latest year for which directly comparable statistics are available due to the pandemic) the number of Scots living in social housing was 22.8% with 14.3% living in the private rented sector.’

‘The problem is that supply has not kept up with demand and so we have the worst shortages in the rental market that anyone has ever seen. Mr Harvie believes that the PRS will not shrink as a result. He stated that the vested interests always warn of this but don’t leave. He better hope that he is right because if he is wrong the number of tenants who will not be able to find homes is going to explode in the coming years’, he continued.

Alexander added: ‘At a time when the Scottish government is publishing a paper on economic growth after independence, they state that re-joining the EU and encouraging greater immigration will be a key pillar of their policy. Perhaps they should check on where they will house these EU workers (prior to the pandemic 40% of all PRS tenants in Scotland were from outside the UK). If the private rented sector continues to shrink, there will be no homes for these workers and economic growth in Scotland will be even harder to achieve.’