Rent cap zones have not worked, Scots Ministers admit as first housing plan launched

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The Scottish government has admitted that its ‘Rent Pressure Zones’ have been a flop but nevertheless vowed to make rents more affordable in its first ever long-term national housing strategy.

Housing To 2040 lays out its aim to drive improvements in the private rented sector, improving accessibility, affordability and standards.

A Rented Sector Strategy planned for later this year will provide more detail, while it’s also bringing forward a new Housing Bill early in the next parliament to strengthen tenants’ rights, along with details on a Housing Standard which will cover all homes.

The much-criticised Rent Pressure Zones were designed to help local councils give tenants more protection from unreasonable rent increases, but research has shown that none have been able to meet the stringent tests giving them the ability to cap rents.

The government promises to reform this policy, “to allow us to take localised approaches in areas experiencing the impacts of high rents, based on evidence and lived experience, and make sure that we do not unintentionally drive rents up or impact on investment in parts of the country that are not experiencing such pressures”.

Unreasonable rents

To do this, it will start collecting data on the private rented sector, so it can identify areas suffering from unreasonable rents. It adds: “By the end of 2021, we will have undertaken an analysis of what is required and will set out our intentions.”

The new strategy, which is spearheaded by Aileen Campbell, Cabinet Secretary for Communities and Local Government (main pic) will set out its aims to introduce pre-action protocols on a permanent basis, making duties on landlords to work with tenants prior to evictions a legal requirement. Potential reforms to the current grounds for repossession under the Private Residential Tenancy will also be considered.

It explains: “The Rented Sector Strategy and new Housing Bill will give us and our partners the tools we need to deal with unreasonable rent increases and give people genuinely affordable choices.”

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Helping Landlords Sell despite evictions ban extension to 31st May

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It was an evictions ban that was due to end on the 31st March, but the government has announced an extension to the ban on evicting tenants. A survey conducted by This Is Money showed that 70% of landlords have been contacted by tenants worried about paying rent.

The post Helping Landlords Sell despite evictions ban extension to 31st May appeared first on Property118.

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Green London mayor hopeful pledges to help tenants buy out their landlords

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Green party candidate Sian Berry has taken aim at landlords in the capital in her bid to oust London mayor Sadiq Khan.

The long-term renter pledged to strengthen renters’ rights, provide security from unfair evictions and protect them from soaring rents if she wins the upcoming election.

Her manifesto includes winning rent control powers, fighting for the abolition of no-fault evictions, and supporting renters to set up co-ops to buy out their landlords.

Berry has lived in six rented properties since moving to London in 1997 and has focused on renters’ rights as an assembly member.

In 2016 she published the My Big Renters Survey which highlighted the scale of dissatisfaction among London’s renters, with problems including rocketing rent costs, incomplete repairs, lost deposits and fear of losing their homes at the end of each annual contract.

Rent controls

She says she pushed the current mayor for more than three years to acknowledge the need for rent controls in London, pushed back on dodgy definitions of ‘affordable’ housing, achieved a big change in policy to give residents the power to vote down plans that demolish council homes, and won cross party support for ring-fenced funding for young people facing homelessness.

As the official election period begins this week, leading up to the vote on 6^th May, she has also promised to work with mayors from other cities to force change.

Says Berry: “Almost every other major city has lower rents than London. Almost every other EU country has better protections for tenants. London needs a mayor who will be a real champion for renters, bringing down skyrocketing rents and bringing up the standards of housing. It’s time for a Green mayor.”

Read more about the mayoral race.

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FOCUS: Scottish farm tenancies face major reforms if SNP win election

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This time its farm tenancies that come under the spotlight, with the secure traditional agricultural tenancies due for reform if the SNP is successful in the upcoming May elections.

There are three main kinds of agricultural tenancy in Scotland: The 1991 Act tenancies, limited duration tenancies and short limited duration tenancies.

The Agricultural Holdings (Scotland) Act 1991 usually governs tenancies which began prior to 2003.  This type of tenancy is one which gives agricultural tenants the most security of tenure and other benefits. If the SNP’s planned reforms are introduced, this security is about to be enhanced.

Agricultural holdings have been regulated since the first Act of Parliament introduced for farm tenancies in 1883.  Since then there have regular reviews and revisions and today this process is likely to continue, with the direction of travel towards more protection for agricultural tenants.

Major plank

A major plank in this reform proposals is a move to give these farm tenancies a share in any uplift in the value of the whole or part of the land if it is sold off for development. Currently, if some or all of the land is sold for development it’s the landowner who gets the full uplift financial benefit.

Although the tenant gets compensation for the loss of the whole or part of their tenancy, they get no compensation for any uplift in the value of land from agricultural to development use.

Currently, as the law stands, where a landlord successfully obtains planning permission for non-agricultural use across the whole of the farm, the landlord can serve a notice-to-quit on the tenant against which the tenant has no defence.

Although the tenant is then entitled to compensation for any improvements and other disturbance factors, usually equal to five times the annual rent, the tenant cannot share in the benefit the owner receives in the increase in the value gained from the conversion of the farmland from agricultural to development use. This obviously involves, in most cases, a significant increase in value.

It is also the case that where there is a relevant clause in the lease, the landlord can sell off individual packets of land for development, providing the loss of this land to the tenant does not significantly affect the viability of the holding.

The Rent Review Test

Another of the reform measures that could be included in any review of Scottish farm tenancies, if the SNP is successful in the upcoming May elections, is a change in the rules governing rent reviews.

Currently, the secure traditional agricultural tenancy rent review is based on an open market test. This test looks at recent lettings of comparable holdings in order to arrive at a current market value.

But, argue the reformers, this leaves out of the equation the tenant’s own improvements carried out at the farm and also any distortion in open market rents due to shortages of supply.

Writing for The Courier.co.uk Hamish Lean, a partner and head of rural property at Shepherd and Wedderburn, explains how Bob McIntosh, the Scottish Tenant Farming Commissioner, supported by the Scottish Tenant Farming Association, aims to go about reforming these secure farming tenancies.

New framework

The Land Reform (Scotland) Act 2016 had set out a new framework for a rent review test based on the productive capacity of the holding. However, there has been great difficulty in practice in accurately assessing the productive capacity of individual holdings.

Bob McIntosh, the Tenant Farming Commissioner (pictured), is said to support a different type of rent review test based on a mix of factors but primarily on based on an equal balance between the productive capacity of the holding and the market value of comparable farm lettings. This is a similar approach to the method of assessing rent levels in England and Wales.

It is said that such a reform to the agricultural rent review process in Scotland could even survive an SNP election defeat, given that Bob McIntosh’s views command widespread respect within the industry and across the political spectrum.

Hamish Lean expresses the view that secure agricultural tenancies are likely to “become more and more protected to the advantage of the tenant”, whilst tenants with short limited duration tenancies and modern limited duration tenancies “will find that there is more and more freedom of contract and a much lighter legislative touch.”

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