Tenants facing higher costs as landlords prepare for rent controls – while supply in London dips

Almost half of landlords have increased rents in Scotland since the introduction of open-ended tenancies, letting agents claim.

The Scottish Government introduced the new private residential tenancy in December, which introduced indefinite tenancies and the ability for tenants to complain about rent increases.

Local councils are also able to apply to Scottish ministers for a cap on increases if they deem them to be too high in their individual area.

But research by ARLA Propertymark suggests landlords are responding to this uncertainty by hiking rents.

A poll among 361 members of the trade body found 44% of Scottish tenants saw their rent costs rise in January, in contrast to the national average of 19%.

David Cox, chief executive of ARLA Propertymark said: “Rent controls have a history of dramatically deteriorating property conditions as landlords struggle to meet mortgage payments in addition to maintenance costs.

“However, it seems the very idea of these controls – and open-ended tenancies – is now affecting rent prices for tenants; in anticipation, landlords are raising rents to make sure they can make ends meet, should they be introduced.

“It’s now been two full months since this form of new Private Residential Tenancy came into force in Scotland and while in December, just over a third of agents witnessed rent hikes, January’s results show a much larger swing.

“For the sake of the Scottish rental sector we hope this isn’t a growing trend, but while rent controls are on the agenda, it’s just a waiting game to gauge how the market reacts.”

The data isn’t much better south of the border as ARLA Propertymark figures show the number of properties available to rent in London stood at 46% below the national average in January.

Letting agents in London were typically managing 99 properties, compared with a national average of 184, the trade body said.

The capital was also the lowest region for supply in December, but it stood at 130 then, compared to a national average of 200.

Cox added: “The rental market in London should be thriving – the capital is a hub for business and culture and attracts a huge influx of new residents every year.

“But the prospect of being a landlord is becoming less tenable, as potential buy to let investors are deterred by increased taxes and ever more complicated legislation – and higher property prices in London are making it becoming more and more difficult for landlords to make ends meet.

“Government policies designed to help renters now seem to be having the opposite effect, as landlords are moving away from using professional agents. This puts tenants at risk of falling into the hands of rogue landlords, or novice ones who don’t have any experience in the sector.”

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2 Comments

  1. Will

    The market will win in the end. The Government  Bully Boys will make it worse for tenants in the end as the investment market moves away and property supply for rent  reduces. Unlike the utilities companies for example who can “ring” there charges the rental market is made up of thousands of landlord competing for the same business and significant Government interference WILL IMPACT as the 1970’s Rent Act did by killing off the rental market at that time.

    As for the politicians; as they say there are no fools like old fools!

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  2. Woodentop

    So how do they work out if the rent is to high for a property? The more expensive the property, the more will fall out of the market. All they will end up with is landlords having cheap properties, cheap amenities and low risk. Who in their right mind would take the risk doing anything else … rental property is an investment, not a free home and high rents were always dictated by market affordability and balancing itself out. The short sighted left wing communist ideology by MP’s with power has changed that “market balance” for the worst and they are doing their best to make private landlords and properties be straight jacketed into high risk, tough you can’t do anything about it, for social housing failings and no longer a free market.

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