Rent freeze threat ‘stopping large-scale housing developments’

A prominent businessman has told the Scottish media that the country’s rent freeze policy has led to two major housing schemes being put on ice.

Sir Tom Hunter - a self-made millionaire with decades in sportswear and property development - has spoken to the Glasgow Herald following the first few months of the Scottish Government’s rent freeze in both the private and social housing sectors.

Hunter says: “The Scottish Government came out with a rent freeze which on the face of it looks good for the people who are not paying more money. But it stifles supply, basically. I personally know of two big schemes in Scotland that are just not going ahead until there is future clarity about what is going to happen in the rental market. So, there are some big decisions to make about housing.

"In the longer run it makes things worse because if there is less supply coming into the market and more demand… prices sky-rocket. There needs to long-term thinking here and not just one-sided thinking.”

The Scottish Government recently introduced a rent freeze to last until at least April. 

The Cost of Living (Tenant Protection) Bill gives ministers temporary power to cap rents for private and social tenants, as well as for student accommodation. This cap, which applies to in-tenancy rent increases, has initially been set at 0 per cent until at least March 31 2023. 

Under the Act, Scottish ministers must report and review every three months on the need for the provisions to either be continued or to end, based on the evidence available at the time.

The first report, covering the period October 28 to December 30 will be laid before the Scottish Parliament in the first half of January.

John Blackwood - chief executive of the Scottish Association of Landlords - has already said:  “I have been inundated by landlords saying they will be removing their vacant properties from the rental market, and I don’t blame them. Who on earth is going to let a property in the knowledge that they will be unable to meet their own financial and maintenance obligations if their tenants don’t pay the rent or their outgoings increase? 

“Instead of helping tenants pay their bills, the Scottish Government has chosen to penalise people who have provided the homes politicians have failed to provide for decades.”