“Private rents in Glasgow rocket as landlords exit market” What brought this on? The report from the Glasgow Evening Times quotes Colin Macmillan of Glasgow Property Letting as saying,
“Whilst the reality of the Scottish Government’s sanctions and actions are filtering through the private rented sector, many traditional landlords have had enough and are exiting the market.
“With an oversubscription of university places, we find ourselves in a perfect storm.
“Fewer properties available with unprecedented demand equals hyper-inflated rents.
“We also find ourselves in a cost of living crisis at probably the worst time of the year, with energy costs rising as the temperature is falling, and subsequent worries that rent arrears may increase also.”
The situation the Scottish Government created got so bad that even the Scottish Government noticed. The Negotiator, a site for residential agents, reported yesterday that the Scottish Government had U-turned, replacing a rent freeze with a cap on rent increases.
The Scottish Government has dropped its planned rent freeze from April in a major U-turn.
Ministers are now proposing a 3% rent cap for six months, with higher increases up to 6% allowed in exceptional cases.
Nicola Sturgeon, Scotland’s First Minister, led on the announced rent freeze in September, but left housing minister Patrick Harvie to reveal the climbdown.
Harvie said the Government now accepted a rent freeze would hit landlords too hard: “While the primary purpose of the legislation is to support tenants, I recognise that costs have been rising for landlords too.
Well, “disastrous” to “bad” is an improvement. But unless and until the Scottish government realises that both rent freezes and rent caps are very nice for tenants already in place but very bad for anyone trying to rent a house or flat from the day they are announced onwards, times will be hard for those seeking to rent in Scotland.
Exactly the same thing that has been happening in Ireland over the last few years.
Ye gods, why is this outcome surprising to anyone? Have the same thing here in NZ, government declares open war on landlords and then wonders why there is a crisis in rental accommodation?
Here they have:
Mandated standards on insulation, heating and double glazing
Eliminated the ability to claim a whole range of business expenses for landlords (including interest costs)
Changed the tenancy act to make it very difficult to remove tenants
Removed the right of landlords to prohibit pets
making it basically impossible for landlords to increase the rent for an existing tenant
Threatening to increase capital gains tax
And so on. The result? Mums and Dads with one or two rental properties cashing out of the rental property market.
Amazingly, rental prices start climbing as competition hots up.
And this is somehow surprising? Much easier to kick the shit out of scumbag money grubbing landlords….
Obviously we must move to public-owned housing, to protect the children.
This has been a well understood dynamic since the 1800s, so any politician pushing this needs to be tarred & feathered
Gunker, yes indeed. I posted a link last October to a piece in gript.ie called “When will Ireland admit that rent controls are a catastrophe?” It included the words “As of today, there are about 700 homes left available for rent in the entire country”, which despite everything I know about the effect of rent controls I found hard to believe, but was confirmed by a separate report from Sky News.
Oregon decided to do this too.
I didn’t mind the rent control. That was livable. Against it in principle,, but I could live with it.
What I could not tolerate was the inability to NOT renew a rental agreement. I had made a contract for a year, not for life.
I sold my rental
Gunker: As I’ve mentioned before, exactly the same thing happened right here 100 years ago. Either they don’t know (which is distinctly possible) or, contrary to all the available evidence, they think they’re smarter than their predecessors.
So, all these landlords are selling…whose buying?
Seems I read somewhere that the fraction of homes in the US owned by big corporations rose dramatically in the past couple of years…one of several reasons why prices rose so sharply (bigger reason was probably the lockdowns shutting down the supply of new homes?).
If true, did those companies push for these crazy anti-landlord laws as in paid the pols to do it or hired the lawyers who helped write the “laws”? One of a hundred inquiries no elected body will ever pursue.
GregWA, in this case, I think we are looking at an “unintended consequence” , aka the road to hell is paved with good ( albeit stupid) intentions.
I saw the same thing strangling small manufacturers in California – only big firms can afford the regulatory overhead increases. And guess what? Those big firms have options like moving manufacturing offshore. The little guys just go out of business.
Listening to most politicians, and I am a politician (at least a local one), talk about markets is like listening to a Cave Man talk about astrophysics – they have no idea what they are talking about. They assume that prices and wages are determined by greed and compassion, not supply and demand, and that as they are more compassionate than other people – they can force greedy landlords, employers, and business owners to charge lower rents, lower prices, and pay higher wages – with no bad effects at all.
It is the economics of the “Johns” (never trust an economist whose first name is John – JUST A JOKE) – such as John Hales in the 16th century with his doctrine that inflation was caused by greedy landlords (not government debasing the coinage to fund the war in Scotland), or John Maynard Keynes with his doctrine that unemployment was caused by “lack of demand” (not such things as the Trade Union Act of 1906 and other Acts, such as the legalisation of physical OBSTRCTION of the entrance to a business in 1875, – which prevented the labour market clearing), or John Kenneth Galbraith who told a young Klaus Schwab (yes the non economist who is the head of the World “Economic” Forum) that the economy could, and should, be centrally planned – “Stakeholder Capitalism” the Corporate State (what Mussolini had called “Fascism” the goal of the WEF and other such associations, although they do not use the “F word”).
“But Paul – surely this is just SNP and Labour Party politicians, surely no Conservative Party politician would talk in this absurd way about prices, rents and wages…”
Errr – no comment.
Democrats over here on my side of the pond are always quick to mock those of the religious right who don’t believe in evolution. While there are many of those a more pertinent series of questions begins with “What does it matter?” How does whether or not you believe in evolution affect the day to day life of 99% of us. Question #2, “Do you understand the law of supply and demand.” Economics affect each and every one of us every day of our lives, and politicians and voters do not understand (believe) in them. And i’m certain that the majority of those mocking the non-believers in evolution could explain natural selection. After all, natural selection isn’t very compassionate.
Someone mentioned tarring and feathering above, but I’m not sure it would convince anyone. For the most part, we are ruled by cynics and dullards and some cases they are both.