Lenders pledge to help address housing issues in Scotland

The Council of Mortgage Lenders (CML) says it’s ready to work with the newly-elected government to implement a range of housing market solutions in Scotland.
Following the success of its first Scottish stakeholder forum last week, CML Scotland says it’s now poised to work with the Scottish Government and others on implementing a range of housing market initiatives.
Representatives of CML Scotland met fellow housing industry professionals and contacts from government, charities and consumer groups to discuss a wide range of issues at its inaugural forum in Edinburgh.
Senior policy adviser John Marr said: “It was very useful for us to be able to discuss a broad range of issues with this influential group of stakeholders. 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.”
Lenders says they expect the new government will pursue a busy agenda of housing initiatives and high on its list of priorities will be the implementation of a series of major changes to the private rented sector introduced through the Private Housing (Tenancies) (Scotland) Act.
According to CML Scotland, among its measures, the Act presents challenges to the buy-to-let sector by introducing measures like preventing landlords from stipulating a minimum tenancy term, and allowing tenants to terminate their rental agreement with just 28 days’ notice. It will also enable the government to cap rents if it thinks they are too high.
At the meeting on Friday, representatives of CML Scotland warned that the cumulative effects of a series of reforms affecting landlords could restrict provision in the private rented sector and hamper the government’s aspiration to increase housing supply across tenures.
As well as the reforms introduced by the Act, landlords acquiring new properties must now pay higher rates of land and buildings transaction tax. CML Scotland says it believes that the overall effect of the proposed reforms will be to reduce the appetite of both landlords and lenders for buy-to-let borrowing and therefore restrict the availability of privately rented accommodation.
On the plus side, however, CML Scotland says it’s 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 debts.
The stakeholder meeting also discussed plans by lenders to fund increased provision of social and affordable housing. Last autumn, the SNP-run government in Scotland announced the allocation of £3 billion 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 decision to advance loans to individual borrowers could also be affected by proposals announced earlier this spring to reform council tax, which has been frozen in Scotland since 2007. From next year, higher rates of tax could be applied to properties in the four highest bands in order to raise £100 million a year to spend on schools.
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