A year ago, former first minister Nicola Sturgeon capped rents on existing tenancies at 3pc and placed a pause on evictions. Both won’t lift until March 2024.
Ms Sturgeon also hiked taxes on second home purchases from 4pc to 6pc. In England, the surcharge for second home buyers is just 3pc.
Duties on buying property in Scotland were already high for landlords, with taxes kicking in at £145,000, or £175,000 for first-time buyers – versus £250,000 and £425,000 in England.
To add insult to injury, Scotland’s plans to require all new rental properties to achieve an Energy Performance Certificate (EPC) grade C by 2025, and all remaining rental properties by 2028, are still going ahead.
Fife landlord Mr Tyson says he will have to evict at least two of his tenants – one of which is on benefits – because the properties have become loss-making investment. “I can’t wake up every day and keep losing money.”
The tenants, he says, were willing to pay the extra so they could stay in what they have come to know as their home. But the Government’s rent cap won’t let them.
Sussex landlord Mr Claringbull said his tenants have stayed in his properties for decades because the rents have always been sensible.
“We run a socially conscious business. We do good things by helping people have somewhere nice to live. No-one is excluded and everyone is given a chance and looked after. I think there are more of us than the public realises.
“In return, we just want to have enough money to pay the bills and live off. Most landlords never retire, they just pass away exhausted.”
‘Housing benefit clawback left me £6k short on rent’
In his Autumn Statement last month, Chancellor Jeremy Hunt announced that the Local Housing Allowance (LHA) would be re-pegged to the 30th percentile of local rents in April next year.
The announcement came after years of lobbying for the change, which marks the first in four years. Around 1.3 million private renter households rely on Universal Credit or Housing Benefit.
However, the benefit cap – which caps someone’s housing allowance – will not be uprated next year. This means a couple with two children receiving Universal Credit will hit the benefit cap in 83pc of local areas from next April, according to the think tank Resolution Foundation.
LHA rates will also be frozen from 2024 onwards again, which the Resolution Foundation said will simply create “arbitrary shortfalls between rents and housing support” again before the next reset.
The disparity between LHA rates and the rent landlords need to turn a small profit has pushed many out of the sector, according to Crisis.
But there’s another problem with the system. Mr Claringbull says he lets properties to housing benefit claimants, and the council pays the allowance straight to him.
