Regulation  

CML comes out against Scottish rent controls

CML comes out against Scottish rent controls

The Council of Mortgage Lenders has moved to discourage the Scottish Government from introducing rent controls.

The SNP-led executive has been consulting on its proposals for a new tenancy system which would include removing the no-fault grounds for repossession and making landlords offer a minimum tenancy of six months.

As part of this the Scottish Government has also carried out research into rent levels in north of the border and has consulted on what action it should take on them.

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In response, the CML’s policy consultant for Scotland Kennedy Foster said: “As the consultation recognises rent levels form a complex picture and while some areas such as Aberdeen and Edinburgh may have seen above average increases in rent levels these are very much as a result of demand exceeding supply.

“We believe that the introduction of rent control is likely to dampen appetite amongst institutional investors to invest in the sector, will impact adversely on the availability of buy-to-let mortgages, will result in higher rents being set at the outset to compensate for lower rent increases during the rental term and could impact on quality if a rental yield cannot be achieved to allow continued investment in the property.”

The CML also opposes the Scottish Government’s plans to removing the no-fault grounds for repossession and the proposals to exclude the ability to roll-over a tenancy on a monthly basis.

In a statement the Scottish Government said the private rented sector has more than doubled in the past 15 years and covers an eighth of all homes in Scotland.

It went on to say: “We want the tenancy system to work well for all tenants.

“This has been an important part of developing the proposals in this consultation.

“Some tenants need more secure, longer-term tenancies, while others greatly value the ability to move in and out of tenancies.”