Update on the Potential Temporary Eviction Ban and Rent Increase Freeze and The Positive Outcomes

by Gordon Campbell

29^th September 2022

The Scottish Government coalition led by the SNP and Green Party, recently stated they would look to introduce a temporary rent freeze and eviction ban to help tenants with the cost of living challenges they may have.

There was no substance or detail to that announcement.

They merely wanted to grab some headlines ahead of the UK governments recent announcements.

It has yet to be confirmed to what the detail is and if in fact they can legally do this.

So  it is business as usual for us.

Having been in property for over 30 years I have seen and heard these situations before.

Am I worried. No

This will bring an opportunity after and if this is implemented.

Why? Read the summary at the end of the blog to why I think it will.

Below is a recent statement extract from SAL – Scottish Association of Landlords.

16 September 2022 News

"Since the First Minister’s announcement last week of a freeze on rent increases and a ban on evictions, we have been inundated with queries from members on how these policies will work in practice.

Draft legislation is not expected to be published for another few weeks and to date we’ve been unable to get any concrete guidance from the government on how these measures will operate.

Based on the limited information we have available just now, we believe that the measures may operate as follows:

Eviction ban – we believe this may operate in the same way as the eviction ban which was in place during the first winter of the Covid-19 pandemic. If so landlords will still be permitted to serve tenants with notice to end the tenancy as normal.

Freeze on rent increases – we believe that the government’s intention is to legislate to prevent landlords issuing any rent increase notices from 6 September 2022 until at least 31 March 2023. Rent increase notices issued already which come into force before the legislation comes into force (this date is so far unknown) are likely to be enforceable.

Whether rent increase notices issued more recently will be enforceable is more uncertain.

The government has reiterated that they are looking at how to support landlords negatively impacted by these policies but no information has been provided on what support, if any, will be provided.

We are currently considering our next steps and what potential legal action could be taken to protect your interests. However, until draft legislation and details of any landlord support are made available we are unable to properly assess our next steps."

Summary:

In the past when governments or public sector quangos like Shelter try to meddle with the private sector and tell landlords and investors what to do, it always has had the opposite effect in what they are wanting or trying to do.

As a result, landlords who are not professional landlords and more accidental landlords e.g. who have inherited or keeping the property they previously they lived in before buying a new property to live in, may now decide to sell their property.

That results in less availability for rental stock

That then leads to rents increasing and house price increasing.

We have seen that recently post Covid where demand has been huge, continues to out strip supply and rents and house prices go up.

That will not change and will continue.

So this proposed short term and temporary policy will have the net effect it is intended for.

New properties coming onto the market for rent will command higher prices than before.

Properties that we sell are always at the correct current rent level so the short term is of no detriment to you.

Medium to long term – rents will increase. Demand will grow and house prices will continue to grow.

Seize the opportunity.

Whenever you are ready to talk about your property investing goals, send us an email and we can arrange to set up a call.

Alliance Property Group. Making a Difference

Thank you for reading

This blog is intended as a guide and personal thoughts only, and does not constitute legal advice.