‘Flenched’: a Scots word to describe weather that looks like it’s going to improve but never really does.
(colin shared an “on this day” photo with me, 4 years ago it was 27 degrees, today I think it is 7!)
Word of the day is ‘snudge’ (17th century): to nestle quietly and snugly, with little attempt to move.
Dear All,
Hope that all is well with you and that this week has been treating your well. I had my second covid vaccine yesterday and feeling slightly ropy, so I will keep this as informative and to the point as It can!
As my old drama teacher would say, I wont fudge or wander with writing on the page and after the Eurovision result I am sure you know I could ramble for a page or two about that!
Tenants emails
Previous landlord and tenant emails can be found at
https://glasgowpropertyletting.com/blog/
The most recent tenant email reiterated where funding can be obtained should they be suffering financial hardship.
Council tax
As you know we use a third part to inform council tax and the utility companies of the change of tenancy when a new lease starts, and ask Iammoving to trouble shoot any issues that may occur.
Citylets Quarterly report
The entry to 2021 may not have been the happy new year UK residents would have hoped for. However, within the wider context of such widespread and uncertain times the positive perspective of the property market remaining open will not have been lost to many. The rental market in Scotland operated throughout with unseasonably high activity in some areas as renters came to terms with the reality that working from home could be a feature of modern life for some time and as such the requirement to re-adjust the home environment, whether by location or size or access to open space.
The picture in the first quarter of 2021 was mixed with areas out-with major cities continuing to report strong demand relative to supply but within cities the seasonal student demand was simply absent. Additionally, mixed fortunes were reported by agents as regards students also vacating their leases for the current academic year. It is likely that Q2 will see noticeable uptick in student demand, and generally, as confidence grows for a sustainable return to life as near normal with optimism that students can take up their leases for the new academic year and the autumnal hiatus of 2020 will not play out for a second time.
Areas within commuting distance of Scotland’s major cities continue to record sustained positive annual growth, including West Lothian (3.5%), South Lanarkshire (3.8%) and Renfrewshire (3.6%). The sharp associated decreases in TTLs, down 17, 17 and 15 days respectively strongly suggest rents will rise materially into 2021 and may reflect structural market change with increased demand relative to supply. Rents in Scotland rose to £826 per month on average over the quarter with 2 and 3 bed properties posting the largest gains at 3.4% and 5.8% respectively.
Demand for property to rent in Glasgow remained relatively high with rents continuing to move upwards once again at 5.8% YOY to £838 per month. In sharp contrast to Edinburgh, the largest gains were recorded for the largest properties.
Rent Controls Ruled Unlawful
One of the most controversial and debated pieces of legislation in recent years, has been ruled unconstitutional by Germany’s highest court. A cap introduced in February 2020 to combat soaring rents in Berlin, violated the Basic Law and as such was unlawful, in the view of the Federal Constitutional Court in Karlsruhe.
The rent cap is reported to have affected 90% of properties in Berlin (1.5m), for which rents had been frozen for five years at their June 2019 level. Any existing rents which were defined as excessive at the time, had to be reduced too. Past 2025, any rent increases would have been limited to 1.3% per year in line with inflation.
However, Berlin’s rent controls policy had come under the attacks from its opponents who claimed that it deterred investors from building new homes, fuelling demand for existing stock and ultimately having a detrimental effect on tenants.
There have also been reports of landlords increasingly introducing a shadow rent clause in tenancy agreements, binding renters to pay an increased price in the event of the court abolishing the rent controls policy.
Now that this scenario has materialised, many renters face the prospect of paying backdated rent.
The Fair Rents (Scotland) Bill
The ruling on Berlin’s rent cap policy comes as a huge blow for supporters of a blanket restriction on mid-tenancy rent increases in the Scottish Private Rented Sector.
The Fair Rents (Scotland) Bill was first introduced before the Scottish Parliament in June 2020, however, due to concerns about there not being sufficient time for the Bill to complete its progression through parliament before the May elections, it was rejected by the Local Government and Communities Committee. However, following political pressure, a consultation into the Fair Rents (Scotland) Bill was held in October 2020.
In a formal response to the consultation, Propertymark who doesn’t agree with the overall policy aim to control rent levels in the private rented sector, highlighted that the policy could lead to a reduction in supply and have a negative impact on housing quality.
Propertymark also raised concerns that the proposals set out in the Bill, could have unintended consequences, namely landlords who would have otherwise not increased rents, may feel that they now have ‘permission’ to do so on an annual basis, as the Bill introduces a principle of a once-a-year increase.
Reform of existing Rent Pressure Zones
Now that the Scottish National Party has won the elections, ARLA Propertymark’s Daryl McIntosh, Policy Manager for Scotland, Wales and Northern Ireland, believes that the party’s priorities will be to reform the existing Rent Pressure Zone legislation under the Private Housing (Tenancies) (Scotland) Act 2016, to introduce some form of rent control to meet with their pre-election promises.
Mr McIntosh said: “The message from the SNP manifesto for the 2021 election was for the introduction of a new Housing Bill, introduced early in the next parliament to provide greater protection from unreasonable rent increases.
“There remains very little evidence that capping rents provides for a successful PRS, all indicators pointing the opposite way, with landlords poised to withdraw investment leading to a diminished supply of private sector housing adding more pressure for an already short supply of social housing.
“There appears to be a notion all landlords are privileged, extracting rents from tenants in pursuit of financial gain. The statistics actually show most landlords own only one or two properties and many are elderly relying heavily on rental income as a source of income.
“Prior to considering any new policies the Scottish Government must have robust data collection procedures ensuring any decisions made are on the evidence in front of them.”
Take care and stay safe, I am going to enjoy my annual leave and doing my tax return(!)
As always please email into admin@glasgowpropertyletting.com with any queries and one of the team can give you an update,
Kindest Regards
Michelle O’Donnell
Branch Manager
17 Elmbank Street
Glasgow
G2 4PB
0141 221 3990
Registration number LARN1903009
VAT : 174415411
SC345735
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