Scottish Rent Freeze and Eviction Ban – a local letting agent talks to Polly Lamb, Fair Housing for Frome Director
The Scottish government plans to freeze all public and private rents for this winter and ban evictions to protect tenants and help with the cost of living crisis. The Telegraph called Nicola Sturgeon’s bold policy announcement ‘a war on Scottish landlords’, but this cheap media click bait only serves to divide people further and generate more mistrust between landlords and renters.
The point is, will it work for both landlords and renters and is it likely to be adopted in the rest of the UK? The renters’ union Acorn has called on Liz Truss and Welsh First Minister Mark Drakeford to roll out a rent freeze in the rest of the country, tweeting ‘We need a rent freeze too! The cost of living crisis shouldn’t cost anyone their home.’ To find out what the local letting professionals think, I talked to Ian Rogers from Rogers and Co, one of the largest Frome estate and letting agencies.
Some landlords find it difficult to keep up with the costs of new policies because they might have only let their properties through circumstance not choice
Ian was keen to keep an eye out for the detail of how it would be implemented, having worked with an open market for so long. He said, ‘Sadly we’ve seen massive hikes in rent this year of around 15% so rents are likely to stop rising naturally anyway. We certainly won’t be looking to increase rents at the end of tenants’ agreements. When tenants move out, we must advise the landlords, who are our clients, to re-advertise at a rent which reflects the market but we are unlikely to be putting rents up for tenants who are staying.’
One policy implemented in Scotland years before it became law in England was a ban on tenant fees in 2012. The ruling was seen as something that would push rents up as agents tried to make up the loss of income. I asked Ian about it and if he thought England would also follow suit on this latest Scottish action on the rental sector. He replied, ‘I think we are likely to see a rent freeze here; we do seem to follow what they do. The tenant fee ban was good because it was only an extra payment for agents. However the ban on fees has led to a few tenants pulling out at the eleventh hour if they find a different property, because they have made so little financial commitment. There is no money to compensate the landlord or agent at that point.’
War on Landlords?
So would a rent freeze be seen as a war on landlords? Ian says ‘Yes, it is an attack.’
I ask ‘Even though rents have risen so much already with the runaway market? If mortgages have not risen in the same way, surely it would be affordable for landlords to freeze now?’ Ian replied that it would be manageable for most. To illustrate this he said that 95% of their client base of landlords could shoulder the legislation costs that have come their way over the past few years, and he cited mandatory electrical checks being a costly example. But he said that some landlords find it difficult to keep up with the costs of new policies because they might have only let their properties through circumstance not choice. These accidental landlords need every penny of the rent to pay rent somewhere else, for example. This estimated 5% of his agency’s landlords might be trying to pay to upgrade their property’s energy efficiency when the boiler breaks down and they don’t have the cash flow to cover it.
It left me wondering if Rogers and Co’s 5% was a typical proportion of landlords who were struggling to cover the costs or, judging by the reaction of the trade press in the rental sector, that the figure was much higher. We need more available rental properties as a country but we also need landlords who can afford to keep up with repairs and safety legislation. Ian pointed out that when landlords approached his agency asking them to find a new tenant but without the ongoing management service, some of them are unaware of their responsibilities. If a tenant had lived in an unmanaged property for years, the landlord might not have kept up with legislation during that period and can be quite shocked to find there are new costs.
Should we revisit the eviction ban?
Even if the new Housing Secretary Simon Clarke doesn’t follow the Scottish First Minister’s lead in proposing a rent freeze, might he consider another temporary eviction ban? The idea has been tried here during the Covid lockdowns. I asked Ian Rogers if the eviction ban had affected his tenants and landlords. He said ‘Landlords rarely give notice unless the tenant is abusive or there is no rent for a prolonged period. During lockdown, we had several landlords who insisted on not charging for 3 months at a time and others who wrote off unpaid rent so the tenants didn’t get too far behind.’ He didn’t think a ban would cause a problem for most landlords.
It’s good to know that some local landlords are sympathetic to renters’ problems because it looks like a challenging winter ahead. At least a rent freeze would put a stop to agents letting to the highest bidder, as the reports on social media claim is becoming commonplace when looking for properties. One thing is certain, Liz Truss will need to put forward a package of bold policies to help people with all their bills to avoid homeless numbers rapidly increasing.
Fair Housing for Frome develops projects to improve housing locally. See our Facebook pages for more information.