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Scottish housing bill sparks concern for buy-to-let sector

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  • 20/04/2016
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Scottish housing bill sparks concern for buy-to-let sector
The Council of Mortgage Lenders has warned a series of reforms to the Scottish private rented sector could hamper government plans to increase housing supply.

Speaking at the inaugural meeting of the CML Scotland stakeholder forum, members voiced concerns surrounding the changes being introduced through the Private Housing (Tenancies) (Scotland) Act.

Those include challenges to the buy-to-let sector, such as preventing landlords from stipulating a minimum tenancy term, and allowing tenants to terminate their rental agreement with just 28 days’ notice. The bill will also enable the government to cap rents if it thinks they are too high.

Senior policy adviser for CML Scotland, John Marr, said: “We know that housing will be a key priority for the newly elected government after 5 May, and it was very helpful to set out the views of lenders and to hear what other industry professionals think about current housing topics.”

Under the new act, landlords acquiring new properties will also have to pay higher rates of land and buildings transactions tax and CML Scotland believes the overall effect of the proposed reforms will be to reduce the appetite of both landlords and lenders for buy to let borrowing, restricting the availability of privately rented accommodation.

However, the body said it is pleased that the government has agreed to amend the Act to allow lenders to recover possession from the landlord when they need to sell a rental property to recover unpaid mortgage debt.

The stakeholder meeting also discussed plans by lenders to fund more social and affordable housing. Last autumn, the SNP-run government in Scotland announced the allocation of £3bn to help build 50,000 new homes if it was re-elected.

But the SNP’s plan will also require funding from CML members, who already help to finance social housing in Scotland.

“Lenders will want to see the current benign operating environment for housing associations continue, with robust and appropriate oversight of the sector by the Scottish Housing Regulator”, the CML said in a statement.

 

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