Private rental sector needs clarity from Scottish Government - David Alexander

21st Jun 2024
David J Alexander
Private rental sector needs clarity from Scottish Government - David Alexander - D. J. Alexander
Progress will only be made through cooperation and open and frank discussion with all involved in the sector, writes David Alexander

Scottish Housing Minister, Paul McLennan, has said that he will be making a statement today on what the Government is doing to address the housing emergency. With eight Scottish councils now having declared an emergency and the government itself announcing a national emergency just over month ago the sector needs clarity and a sense of what is to be done to resolve this serious issue.

In a podcast this week with Scottish Housing News Mr McLennan said: “How do we protect the most vulnerable as against trying to get investment into the sector. So that’s not just in terms of institutional investors but also the private sector itself”. He continued: “We remain committed to rent controls, but it has to be a balance where we make sure we get investment into the sector to make sure there are more houses being built and generate more capacity further down the line.”

The background to this is a major freezing of investment in the private rented sector (PRS) which will remain until there is some clarity about the direction of travel that the Scottish Government intends to take.

Melanie Leech, chief executive of the British Property Federation, recently said: “Scotland is a no-go area for the majority of international investors and for a number of UK investors because of the way it was done. The rent controls were introduced overnight with no consultation and that’s the kind of thing that makes investors really nervous.”

Ms Leech said investment in the build-to-rent sector, where rental homes are purpose-built and institutionally managed, had “dropped off a cliff” as a result of the changes.

However, there appears to be some hope that the Scottish Government is listening to a broad range of stakeholders in the private rented sector including investors, landlords, agents, and builders to ensure the sector is not being punitively treated at a time when demand for homes in the PRS has never been higher.

With social rented housing unlikely to be able to meet demand within the next decade the importance of the PRS in meeting the needs of Scotland’s tenants has never been more important and there needs to be a recognition that if the current housing emergency is to be addressed then consultation, negotiation, and agreement between all involved parties needs to be reached to free up the investment blockage which has occurred in the last two years.

Only by cooperating and being open and frank with the PRS and all involved in the sector will progress be made. This is an opportunity for the Scottish Government to reset its relationship with the sector to ensure that we have a flow of homes into the PRS, the social housing sector, and into the homeowning market to guarantee that rents remain stable, and homes become more affordable.

Rent freezes cannot work, have never worked anywhere, and will not work in Scotland so the most productive way forward is to fully discuss with the sector ways in which the current emergency can be resolved. Mr McLennan will hopefully produce a statement today which addresses these issues and takes heed of the views of the PRS in developing future housing policy in Scotland.

David Alexander is CEO of DJ Alexander Scotland Ltd