THE bursting of the SNP’s balloon of self-righteous superiority has been a wonder to behold. The SNP’s mastery – until recently – of public relations was remarkable but behind the slick soundbites and the whingeing aimed at Westminster there is an appallingly bad performance in improving the daily lives of people in Scotland.
The whole point of devolution was to give the administration at Holyrood the ability to deliver common sense solutions for Scottish needs.
Nowhere is that more necessary than in housing but the SNP are so gripped by lazy thinking that they have gone off on two frolics which harm those who most need help.
Second home owners, including those who rent to tourists, are first in the crosshairs. Let’s double their council tax even though they tend to use less council services than most. All in the interests of striking a blow for those in rural areas who cannot afford to buy a home.Except that narrative is almost complete rubbish.
There are three key problems in rural areas.
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First, is the withering of services such as transport, medical coverage and schools. This is the one which the SNP could focus on but they don’t. Grossly incompetent provision of ferry services, lousy broadband and lack of access to GPs are examples of things which accelerate rather than reverse the decline of the rural economy.
The second and third problems, housing and jobs, are linked but not in the way the SNP see it. They think it’s smart to drive out those who live part-time in rural areas or at the very least drive down the value of their houses.
Second homes are common in many countries – especially Scandinavia which the SNP often holds up as a role model. Second homes, particularly those rented out to holidaymakers, are part of the solution not part of the problem. They need services which create jobs and without jobs however much you drive the price of houses down you do a community no favours.
We have no shortage of land in rural Scotland. We need both homes and jobs to increase the vibrancy of our economically disadvantaged rural areas. Combining the building of new homes whilst embracing the spending power of those who choose to live in our beautiful places part-time is the answer.
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The attack on second home owners is however as nothing compared to the onslaught on private sector landlords who provide long-term rentals.
There is a shortage of homes for rent and rents are rising. The reason for this is simple, demand exceeds supply.
The solution to this situation is to encourage more supply but the SNP have come up with a succession of policies which appear specifically designed to make the problem worse.
The SNP/Green Government has intervened directly in the market to cap rent increases during a tenancy and make it almost impossible to evict a tenant who does not pay their rent.
Almost every economist from across the political spectrum in every country who has looked at the effect of interventions like this have concluded they are daft and harm those struggling to find a home.
The rules may work for those who already have a home, their rent will rise less than inflation and probably less than the rise in their wages and if they don’t pay they can stay where they are. The question is what do landlords do when faced with these rules and who is then harmed?
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The first and most obvious thing they do is reduce their activities or leave the market altogether. The supply of homes for rent then falls which put more upward pressure on rents.
The second thing it does is make landlords very choosy about the tenants they take on. The degree of vetting of tenants has become almost ludicrous because if a landlord gets a bad tenant there is so little they can do.
The result is that economically marginalised tenants get squeezed out. If you can’t pay up-front and can’t provide a guarantor then you are at a disadvantage compared to those who can.
Regulating landlords so they must provide safe and decent homes has a cost but most people would agree that cost is worth paying.
Where the SNP has gone a step too far is to destroy the economics of being a private landlord. Most landlords borrow in order to help fund their purchases. Adding a risk that their income might drop to zero with little they can do about it significantly impairs their ability to raise funds to invest in housing which can then become homes for rent. The end result is a vicious circle – supply falls, pushing market rents up, the Government then intervenes to counter that which causes supply to fall again.
The Scottish Government legislation to cap rents and prevent evictions is due for review in September this year. If the Scottish Government actually want to enable people to find a home to rent at a decent price they should end their counter-productive meddling.
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