Rental reform threat to economic growth, warns David Alexander

25th Oct 2022
David J Alexander

As featured in Landlord Today.


David Alexander, our Chief Executive Officer, says future economic growth in part of the UK is under threat from a radical reform agenda for the private rental sector. 

He says policies aimed at reducing the size of the private rented sector through increased financial, regulatory, and legislative control risk stifling economic recovery in Scotland in the coming years.

The Scottish Government’s ‘A new deal for tenants’ plan seeks to introduce rent controls and, Alexander believes this will discourage existing and future investment in the private rented sector by landlords and property investors - and it comes at a time of growing demand.

In Edinburgh, for example, the population rose by 13.3 per cent between 2009 to 2019 while the wider Edinburgh city region was up 8.1 per cent compared to a Scottish increase of 4.4 per cent over the same period. 

Analysis by the City of Edinburgh Council found that the increase in population was largely due to net overseas migration which they estimate to have numbered 53,030 over the decade to 2019.

Furthermore, in the decade from 2018 to 2028 National Records of Scotland have forecast that the Edinburgh population will increase by a further 6.6 per cent to 552,585 compared to a 1.6 per cent rise for Scotland as a whole over the same period.

David says: “We can see from these figures that Edinburgh and the surrounding areas have been attracting very high numbers of people drawn to the jobs and lifestyle offered in the Scottish capital.

“The private rented sector has provided ideal homes for this large migrant workforce which has come to Scotland, and particularly to Edinburgh and the surrounding areas, and who have helped to expand the economy over the last decade. 

“Unable to access the limited pool of social housing or to buy property, many of these invaluable workers enjoy the flexibility and choice afforded by private renting. 

”This welcome influx of workers into the Scottish capital is one of the reasons why demand on homes in the private rented sector is so high and likely to get higher as the decade progresses. This is also why, as demand exceeds supply, rent rises in Edinburgh have been the highest in Scotland. 

“However, as the Scottish Governments’ own consultation paper points out rent rises in the private rented sector (25 per cent over the last 11 years) remain substantially below wage increases (just over 36 per cent for tenants in the PRS since 2010).”