Over the last two weeks SAL has been conducting a survey of landlord members to gauge the impact of the Cost of Living (Tenant Protection) (Scotland) Act on the private rented sector (PRS). This is the temporary legislation which has introduced a freeze on most rent increases and a delay to the enforcement of most eviction orders granted by the First-tier Tribunal.
The survey elicited the largest response of any SAL surveys to date.
One of the key findings was that the legislation is going to lead to a reduction in the size of the PRS in Scotland. 44% of landlords are planning to reduce their portfolio size in the next 5 years (only 13% are planning to expand it). Back in February when we asked a similar question about plans for the next 10 years, these figures were 34% and 19% respectively. 87% of landlords who are planning to withdraw state that the Cost of Living Act is a factor in their decision or the sole reason (it is the sole reason for 26%).
Landlords were asked how they will go about withdrawing their properties from the market: sell the property to another landlord with tenants in place, wait until the tenants choose to move out or serve notice to evict their tenants. The survey findings indicate that around 10% of tenants in Scotland will be evicted in the next 5 years due in whole or in part to the Cost of Living legislation (it will be the sole reason for 3% of evictions).
The survey also asked about landlords’ approaches to rent setting. This revealed that 37% of landlords never increase their tenants’ rent mid tenancy (just 8% did it annually). 54% of tenants are paying rent below market value (13% are paying more than 20% below market value) and 60% of landlords have previously discounted the rent to help tenants in financial difficulty.
The survey findings have assisted with SAL’s response to a Scottish Government call for evidence seeking information on the impact of the measures on private landlords and those involved in the provision of private rental accommodation.
We are currently conducting two further surveys on the Cost of Living legislation; a survey of CLA members and a second landlord survey to gauge the impact the legislation is having on their finances.
SAL and our coalition partners (Scottish Land and Estates, Propertymark and the NRLA which is the English/Welsh equivalent of SAL) have now moved on to the next stage in seeking further legal advice and specialist reports on potentially challenging the Scottish Government’s decision to freeze rents and ban evictions. A judicial review is a lengthy process with several stages. The coalition is committed to fighting for the rights of our collective memberships and will provide further information as soon as possible.