Letting agent warns of ‘unintended consequences’ of rent controls
Rent controls can unintentionally push up prices and reduce quality rather than heralding more affordable tenancies, according to a letting agent.
Speaking after the Scottish Government published its responses to its consultation for “a new tenancy for the private rented sector (PRS)”, Dan Cookson, head of research at Lettingweb for PRS 4 Scotland said the report makes for interesting reading.
Mr Cookson highlighted that while there was overwhelming support from both the PRS industry and tenant bodies for annual rent reviews, an extended notice period for tenants and redress to an adjudication authority when rent rises were deemed unreasonable (a particular measure that already exists), there was also overwhelming resistance from 70 per cent of respondents to the introduction of rent controls.
This, he argues, is understandable given the latest figures from the Office for National Statistics for July revealed that private rents in Scotland rose by just 2.1 per cent over the year.
In a letter written to The Scotsman, Mr Cookson said that dealing with the lack of supply, and not introducing controls, will help increase quality and bring down prices further.
He said: “It is evident that great progress has been made raising the standards of Scotland’s vital private rented sector in recent years, a sector which is home to 330,000 diverse households from families, to students to professional, mobile career couples, across all income groups.
“What drives up rents is lack of supply and I believe that the responses to the latest consultation allow us time to draw breath.
“What’s needed now is a period of constructive dialogue to consider how Scotland can use the powers available to it to boost supply, delivering even better choice and quality for those looking to rent and a stable regulatory environment that encourages pension funds and savers to invest.
“Let’s deal with housing affordability in a rounded way and not rush into a crude system of rent controls that has so often been shown to make matters worse.”