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Landlords are increasingly seeing calls for rent control, longer-term tenancies, increased taxation and regulation of buy-to-let properties. Under these conditions, landlords will surely begin looking at alternative business models or they may even abandon the private rental sector (PRS) altogether. These scenarios are putting a large amount of strain on the private rented sector, leading to some landlords choosing to switch to the more unregulated holiday let market. This will inevitably cause an even larger shortage of rental accommodation in the PRS market, and as widely known, shortages lead to higher prices. Rents will soon climb for private rented sector tenants.

As private landlords are urgently required to provide property for a generation of people struggling to buy, they often find government policy, whether influenced by political imperatives or public opinion, providing only discouragement. Social housing provision has also fallen in recent years, making the increase in regulatory hoops for landlords to jump through all the more unnecessary. Chief Executive of SAL (Scottish Association of Landlords), John Blackwood, has stated that, in fact, there needs to be an increased supply of private rental properties to meet the demand of our growing population. With a large number of people facing difficulties getting onto the house ownership ladder, and a shortage of social housing, many people have no other option than to seek privately rented accommodation.

This increased pressure on the private sector, along with landlords now opting to let their property on the holiday market, is contributing to higher rents and problems in finding homes for many across the country. It is vital to understand that increasing rents are not the problem, but rather a symptom of the problem.

In 2016, the Scottish Government implemented new tenancy rules as part of its Private Housing Act, which came into force on 1st December 2017. This put the country ahead of Wales and England, in terms of prioritising security of tenure and tenant rights over a landlord’s ability to control their business. However, it does seem like the UK will be planning to match Scotland in proposed tenancy laws and new regulations.

These are obvious reasons for why landlords are turning to alternative methods to make better returns with much less hassle. Removing a landlord’s ability to control their own investment and business, whilst attempting to impose an excessive administrative regime, will make it harder for landlords to make reasonable returns on their investments. With growing demand for shorter-term holiday lets, such as Airbnb rentals, from other members of the public, particularly in tourist locations and larger cities, many landlords across the country could potentially improve their profitability by switching to this model. However, there is a fear that this trend will lead to disruption to local neighbourhood communities, which will result in this loophole closing due to new regulation.

As the holiday let market is mostly unregulated, and offers significant tax advantages, many landlords are now being pushed from the highly regulated PRS market and into short-term only lets to tourists. Instead, providing homes to both long-term tenants and tourists should be key priorities. All UK governments must recognise that a well-balanced and well-functioning private rented sector is the aim, instead of a rush to regulate.

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