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Daily Record
Chris McCall

Rent freeze in Scotland 'diverting millions of pounds in development to England'

A Scottish Government decision to freeze rents has led to the loss of "hundreds of millions of pounds in developments" to England, a top architect has warned.

Paul Stallan, who co-designed the Commonwealth Games athletes' village in Glasgow, said the SNP/Green decision to intervene in the rental market had been "well-intentioned" but was now "proving to be damaging".

The design expert warned the policy had led to a "complete halting" of the build-to-rent sector in Scotland.

In a post shared on social media, Stallan said: "(The) Scottish Government’s intervention into the private rental sector has been well-intentioned, however as a blunt instrument it is proving to be damaging.

"The Cost of Living (Tenant Protection) Act was conceptualised with good intentions, however what has transpired is a complete halting of inward investment in the Scottish build to rent sector.

"Hundreds of millions of pounds have been diverted in the last six months out of Scotland into development in England. This has been compounded locally by a hike in rents on newly let properties.

"If these temporary measures are extended post March 2023, the private investment, that accounted for 70 per cent of new dwelling completions in 2021/22 will exit Scotland meaning the housing crisis will be compounded, with existing property rents remaining high due to shortage of supply.

"The more product and choice the more affordable the rental landscape becomes."

Nicola Sturgeon announced emergency legislation last year to cap rents for private and social housing tenants until the end of March 2023.

Patrick Harvie, tenants' rights minister, last month signalled his support for the rent freeze being extended beyond next month.

However, a ban on social rent increases will be lifted from April after the Scottish Government reached an agreement with landlords – such as councils and housing associations – to keep rises below inflationary levels of 11.1%.

Council tenants will see their rents rise by an average of less than £5 per week, while housing associations confirmed talks are ongoing to increase rents by an average of 6.1%.

No social landlord is consulting on a rate above inflation, Harvie told MSPs.

A moratorium banning evictions will also be recommended for extension, except in a number of specified circumstances.

The rent cap expires on March 31 but Scottish ministers can seek parliamentary approval to extend the legislation for two six-month periods if necessary.

A Scottish Government spokeswoman said: "We are in the midst of a cost of living crisis, and our emergency legislation has been protecting tenants from significant rent rises and risk of eviction. Initial rents for newly built rented homes are set by the market so are not affected by the rent cap.

"The measures could only be in place for a total of 18 months, if the circumstances demand it and with Parliamentary approval, and we are committed to ensuring that it remains proportionate and necessary.

"Safeguards are built in for landlords, and we have announced our intention to allow modest rises in rents from April onwards."

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