One of the UK’s largest lettings groups has made an outspoken attack on the policies of a political party standing in next month’s elections.
DJ Alexander Ltd, part of the UK-wide Lomond Group, claims the Scottish National Party policies will introduce punitive restrictions on the lettings sector which will result in economic shrinkage, fewer homes, and Edinburgh falling from its pre-eminent position among UK cities.
The SNP manifesto for the elections in Edinburgh states that it will make all short term let owners (including Airbnb) apply for planning permission to operate with stringent limitations on which properties get approval; a system of rent controls to limit rents rising in the private rented sector; and charging people from outside the city a levy to enter the capital.
DJ Alexander says the city already has among the best paid, best educated, and highest percentage of working population in the UK generating among the largest revenues, with among the best and biggest tourism and hospitality markets in the UK.
David Alexander, the chief executive officer of DJ Alexander Scotland, comments: “Edinburgh is among the most attractive cities in the world attracting millions of visitors a year which annually generates billions of pounds of revenue and creates tens of thousands of jobs.
“The result is demand for short and long-term lettings is at a premium for visitors and for the workforce serving the tourist industry. This manifesto, however, appears to wish to dismantle the property market which underlies the city’s success without any regard for the economic or social implications.
“These policies will actually create greater upward financial pressure on property in the city both in buying and renting by seeking to impose a levy on those travelling into Edinburgh to work. The net result will make homes to buy and rent in the city more, rather than less, expensive.”
He says the proposed restrictions on Airbnb style lets will not actually result in more homes for local people.
Instead, he says, it will “simply put more homes on the market to sell. Without any incentives the owners of these properties would be under no compulsion to shift them from short term to long-term letting.”
He continues: “The disincentive for short term lets to move to long-term letting would be driven by proposed rent controls. Again, there is an assumption among politicians that the owners of properties in the private rented sector are fair game to have their incomes disrupted without any say in this artificial interference in the market. Many landlords and property investors may simply decide to move their investments to a more benign marketplace in England by again shifting homes on to the open sales market.
“So, we’ve got fewer tourists because of less short-term accommodation limited by planning restrictions and fewer rentals in the private sector because of rent controls so the workforce has nowhere to live.”
Alexander concludes: “These plans highlight an inward looking, business indifferent, low growth strategy which magically expects the world to remain the same whatever changes are imposed on the market. The assumption is that landlords will put up with lower incomes, hospitality businesses will put up with lower revenues from reduced tourists, and Edinburgh – the jewel in Scotland’s tourist crown – will be allowed to shrink under the banner of ideology over sense.
“Edinburgh’s highly paid, highly educated, highly skilled, highly mobile workforce may then decide to move to another city to live and work where there are homes, hospitality, and a lifestyle that they aspire to.
“Rather than listening to a vocal minority on housing issues the council should be engaging with the business community, with the people who work and live in the city and are broadly happy to pay increased rents because the employment rewards are amongst the highest in the UK.
“The answer is to build more homes, to expand the social housing sector, to boost the home building sector, and to encourage greater investment in the private rental market.”