Scotland’s private rental changes: English landlord’s take note!
By Carl Agar
Landlords and tenant rights groups in England will be turning their sights north of the border from January 2018 as sweeping changes under the new Private Housing (Tenancies) (Scotland) Act kick in.
In Scotland the changes have created outcry in certain quarters with many interested parties claiming the changes benefit tenants more than landlords, a point supported by homelessness charity ‘Shelter’ in Scotland who boasts that it was their campaigning for increased tenants’ security that helped bring about this new legislation. It’s worth noting that the changes don’t apply to students in purpose-built accommodation or social housing tenants.
Main changes under the new Scottish Private Residential Tenancy (SPRT):
- Tenants can’t be evicted without good reason (ie. the ‘no fault’ ground no longer applies). A landlord can only evict a tenant under certain criteria such as if he or she plans to sell the property, move in themselves or carry out major renovation work. Other factors include criminal behaviour by the tenant, three month’s rent arrears or some other breach of the tenancy agreement.
- Tenants can challenge the landlord in a tribunal (which is free) if they suspect they have been asked to leave unfairly. The landlord must provide evidence and if selling, must advertise the property at market value.
- If intending to repossess the property landlords must give tenants who have lived there for more than six months, a total of three months notice. Even if the tenant leaves the next day the landlord still can’t repossess his or her property for 12 weeks –resulting in the loss of three month’s rent. HMOs geared towards students will suffer most here, with many landlords calculating tenancies on the academic year. A student leaving mid-term would result in increased void periods – making student HMOs less desirable to investors.
- Landlords can only increase the rent only once a year – for which they must give tenants three months notice of their intention to do so. This means that were the interest rates to go up, landlords who had already decided that year’s rent, would be out of pocket.
- Tenants can appeal the rent increase to a Rent Officer who can then set ‘a reasonable rent’ based on market conditions. If the landlord disagrees with this decision he or she can then take their case to a free First-tier Tribunal.
- Local authorities will have the right to restrict rents if a private rented property falls within a designated ‘rent pressure zone.’ This is for one per cent above the consumer index and lasts for up to five years. The changes in landlord expenses claims may make BTL properties in these areas unfeasible for landlords.
It has been argued by the Scottish Government that the changes to the legislation makes the whole process of private renting easier and gives tenants rights against unfair eviction and rising rent increases.
This was deemed the case by the majority of MSPs for when it came up for debate Parliament last year it was voted through by 84 to 14. Scottish Housing Minister at the time, Margaret Burgess declared that its aims were to ‘rebalance’ the relationship between tenants and landlords.
Whether it does that or not only time will tell but one thing is certain – the relationship is definitely on a far different footing than before. In the meantime, English landlords should watch very carefully in order to learn from any initial Scottish teething problems.
Landlords: what are your thoughts?