Patrick Harvie MSP, Minister for Zero Carbon Buildings, Active Travel and Tenants’ Rights today made a statement that rent caps in Scotland will be extended for 6 months at the current 3% level with the option for this to be increased to 6 following evidence to rent officer. UKAA has responded with the following statement.
The UK Apartment Association (UKAA), the body which represents the Build to Rent (BTR) sector, acknowledges the statement today on the review of housing policy in Scotland, especially in relation to the extension to the imposition of rent caps.
For the BTR industry to deliver the long-term quantity of good quality, professionally managed homes needed to help tackle the critical housing crisis in Scotland (the future BTR pipeline in Scotland currently stands at nearly 9,000 homes, Rettie & Co., 2022), confidence is required of investors, developers, contractors, and all those involved right through to the customer. This confidence is built through clarity, certainty, and consistency – all of which are undermined by rent control.
In principle, the UKAA opposes rent cap in any form as it lowers confidence and inhibits the BTR industry’s ability to deliver customer, community and investor value. Investors invest for the long term, for stable returns and if rent control is in play, it can disrupt and harm the certainty of those returns.
The limited BTR stock in Scotland has been well received by the market to date but following the rent cap announcement, investor confidence has been affected. Some investors are already pausing and / or withdrawing from the market entirely which can only harm the delivery of these much-needed, good quality homes.
The Scottish government has made social housing providers exempt from this cap. As both social landlords and BTR providers hold the same aspirations to deliver good quality housing, in good quality communities, the UKAA argues that the BTR industry should be treated in a similar manner.
It is important that the BTR industry is part of the conversation around this issue and the UKAA and its Scottish Hub stand ready to consult with the Scottish government as we have historically done, during the Parliamentary updates on the emergency legislation. Gillian McLees, Chair of the UKAA Scotland Hub, will be working with investors and the Scottish housing minister over the next 6 months to inform the next review in September.
The UKAA is well placed and ready to be an effective conduit between our members, the BTR industry and the Scottish government, and will work with all stakeholders to ensure a full understanding of the impact of rent control. This UKAA’s proactive engagement in Scotland will prepare us for any future discussions with governments should rent control be consider in any other parts of the UK. We will always take a robust and cooperative position should this occur.