Judicial review survey findings
Over the last few months SAL has been running a major campaign against the unfair and discriminatory rent freeze/cap and eviction moratorium which were part of last year’s Cost of Living (Tenant Protection) (Scotland) Act 2022. Together with our coalition partners we have submitted a petition to the Court of Session in Edinburgh seeking a judicial review of the legislation.
In March 2023 the legal team acting on our behalf asked us to conduct a member survey to gather information which may assist our case.
We received 935 responses to the survey, the largest response to any survey we’ve conducted to date. Most landlords responding to the survey own under 5 properties and the most common rental charge per month is between £400 and £600. The majority of respondents (65.13%) self-manage their properties rather than using a letting agent.
The majority of landlords have mortgages on the properties they let, although there is still a sizeable minority (35.5%) that do not. 76% of those with mortgages have experienced increases in their repayments over the last six months, with the most common increase falling in the range £100 to £250 per month.
71% of respondents stated that their repair/contractor costs have increased by between 10 and 50% in the last six months.
Approximately 42% of the member landlords who responded are facing financial hardship as a result of increased private rented property costs. Of those who report being in financial hardship, the majority (56.6%) plan to alleviate it by selling their properties.
Although not all are facing financial hardship, 71% of landlords stated that the provisions on rent freezes and eviction moratoriums in the Cost of Living (Tenant Protection) (Scotland) Act 2022 have had a material adverse impact on their finances.
69% of respondents said that the 6% rent increase permitted in relation to prescribed property costs is simply not enough to cover their actual increases.
Respondents reported needing to increase rents by an average of 15% to alleviate the impact of increased private rented property costs on their finances. Whilst this might seem like a large increase, it should be read in the context of inflation running at over 10% and the majority of landlords not previously raising rents regularly in the past due to historically low inflation and low interest rates, or even discounting rents to help tenants in financial difficulty. A SAL member survey conducted in November 2022 revealed that 54% of respondents’ tenants are paying rent below market value, 37% of respondents never increased their tenants’ rent mid tenancy (just 8% did it annually) and 60% of respondents have discounted the rent to help tenants in financial difficulty.
84% of landlords reported that the legislation has caused them to delay or cancel property upgrades, 59% reported that it has caused them to delay or cancel energy efficiency improvements and 41% reported it has caused them to delay or cancel scheduled property maintenance.
The above findings have been included in our submission to the court to support our argument that the legislation is unlawful because it breaches the rights of property owners under the European Convention on Human Rights, which UK lawmakers are still required to comply with post-Brexit. The case was heard in court on 4 May 2023 although it is likely that the court’s decision will not be known until several weeks after that date.