Achi news desk-
Earlier this month, the SNP administration announced a national housing crisis.
On the same day, Vertu Motors announced its final results for the year revealing that the sale of a 1.15 acre site next to its Macklin Motors Nissan Glasgow Central dealership in Cowcaddens had failed.
The accounts said the deal “has not been completed as contractually expected, due to the impact of recent legislative changes in Scotland which impose rent controls.”
READ MORE: The Scottish Government announces a national housing crisis
Rent caps were introduced for the first time by the Scottish Parliament in 2022 in response to the cost of living crisis.
It meant that private landlords could only raise rent to tenants by 3% a year although larger increases could be set between tenancies.
The law initially applied until the end of March 2023 but was extended by the Scottish Government until March 31 this year.
Earlier this year, ministers introduced the Housing (Scotland) Bill, which includes new proposals for long-term rent controls for private tenancies.
It would also introduce rent control zones which would see councils assess and send details of rent prices and increases to the Scottish Government, which would have the power to implement controls.
However, the legislation was a key part of the Bute House Agreement with the Scottish Greens.
There is speculation that, since the collapse of the power sharing agreement last month, and the subsequent change in Prime Minister, John Swinney could now argue back on some of the proposals.
READ MORE: Rent controls are putting £5bn of housing spending at risk, says industry
Planning permission had already been granted for flats on the brownfield site in Cowcaddens.
Although not classed as affordable housing, the proposal approved by councilors would be the first build-to-rent development in that part of the city.
That means all of the studio flats, and one and two bedroom flats, would have been built specifically for tenants rather than for sale.
The proposals show that it would also have included a roof terrace, a gym, a café with a terrace, a bicycle workshop, a washing facility, and lounges with balconies.
Miles Briggs, the Conservatives’ shadow housing secretary in Scotland, said: “Abandoning this major housing development in the heart of Scotland’s biggest city shows the reality of the SNP’s disastrous rent control policy.
“After supporting Patrick Harvie’s plans, SNP ministers have refused to accept that he has deteriorated the Scottish housing market at a time when they have finally accepted that we are facing a housing crisis.
“Individuals and families are crying out for house building projects like this, which would have provided almost 350 homes and offered a route out of temporary accommodation or on the housing ladder for many.
“This should be a wake-up call to SNP ministers to stop their plans for permanent rent control zones as part of their housing bill and provide practical solutions to fix Scotland’s housing crisis.”
Housing Minister Paul McLennan said: “The Scottish Government wants to build a rental sector that encourages investment and provides a great service to tenants.
“A fairer, well-managed private rental sector benefits responsible tenants and landlords.
“Our Housing Bill includes a package of important reforms to the rental sector which aim to improve affordability and strengthen tenants’ rights.
“We will continue to work with tenants, landlords and investors as we develop a system of rent control that works for Scotland.”
READ MORE: Visitors to a Glasgow homelessness support center double
Earlier this month, The Herald revealed industry fears that Scotland could miss out on £4.5 billion of housing investment and thousands of new homes because of the rent controls.
David Melhuish, director of the Scottish Property Federation, said that Glasgow and Edinburgh should be attractive cities for investors in the market but that the state of uncertainty surrounding Scotland’s “political and regulatory regime” puts Scotland overall in a category of higher risk than other parts of the UK.
“The building to rent market in the UK started around ten years ago. Around 100,000 units have been built in the UK in recent years, but only around 2000 in Scotland – and that is mainly because uncertainty with the political and regulatory system.
“Cities like Glasgow and Edinburgh should in principle be doing very well with this type of investment,” he said.
Earlier this week, protesters gathered outside Bute House to demand the Prime Minister press ahead with rent control plans.
Scottish Government data published in November revealed that rents increased by an average of 51.6% or even steeper between 2010 and 2023 – including 79.3% in Lothian, and 86.2% in Greater Glasgow, while inflation was 45.7 % during the same period.
However, in the last year, rents have increased by 14.3% to an average of £841 per month, and in Greater Glasgow, rents rose by 22.3% to an average of £1050 per month, while in Lothian, rents rose by 18.4% to’ r average. £1,192 – among the biggest year-on-year growth in the UK.
