Build To Rent ‘may get favourable treatment’ on rent legislation
A controversial consultation document about rent controls is proposing that Build To Rent operators be exempt from the caps which may be imposed on buy to let agents and landlords.
A Scottish Government consultation proposes that rent controls would apply to increases in rent that take place both during a tenancy and where the rent is set for a new tenant. It also states that the Scottish Government is “considering whether it would be appropriate, in certain circumstances, to allow an increase in rent that is in excess of the rent cap.”
The Scottish Government also acknowledges that “some landlords choose not to increase rents during the course of a tenancy, and instead prefer to increase rents between tenancies”. If rent controls apply both within and between tenancies, the consultation suggests that “landlords may move to increasing rent during tenancies, [which] they would not have done before”.
However, the consultation also suggests that the Scottish government is considering a rent control exemption for institutional Build To Rent providers, admitting that “some investors may see rent control as a deterrent to investment”.
This may be a response to highly publicised comments by some BTR operators that they were withdrawing their interest in some Scottish developments because of the rent controls which have existed there for the past year.
At least one property commentator has called out the Scottish Government consultation as being unfair to buy to let agents and landlords.
Neil Cobbold - managing director of automated rental payment company PayProp UK - says a Build To Rent exemption would be seen as fundamentally unfair.
Cobbold has also slammed other proposals from the Scottish Government, contained in its consolation document released with little fanfare two weeks ago.
In addition to long-term rent controls, it wants pets allowed in rental properties, tenant modifications to a property, greater eviction protection, alternative uses for unclaimed deposits and a range of social rented sector measures.
Cobbold says: “This consultation, while addressing some key issues within the Scottish rental sector, is not fit for purpose. It imposes choices on respondents, effectively forcing them to adopt one of the prescribed options, even if they have reservations or alternative ideas to propose. It's a very restrictive approach that doesn't truly reflect the complexity of the issues at hand."
Further permanent eviction protections are also under consideration, including whether evictions should be delayed during winter, or where it would cause financial hardship to the tenant. However, the consultation also suggests that a tribunal should consider if a delay would “detrimentally affect the landlords’ health or long term disability or cause financial hardship”.
In addition, the consultation is also considering views on several other issues, including whether all remaining assured and short assured tenancies should become open-ended private residential tenancies.
Respondents are also being asked to consider if tenants should be allowed to ‘personalise’ their rented accommodation by painting and decorating the rented property or to keep pets, and what should be done with unclaimed tenancy deposits.
Sourced by Letting Agent Today