Scottish government proposes rent cap to ‘stabilise rents’

The Scottish government has announced plans to cap rent increases in areas with rent controls, as part of its Housing (Scotland) Bill.

The proposed amendment would limit rent rises to the Consumer Price Index (CPI) plus 1%, with a maximum increase of 6%.

This cap would apply to both in-tenancy and between-tenancy rent increases.

In a statement, the government says the rent cap will stabilise rents and support tenants and help to tackle poverty.

It adds that the rent cap will provide ‘appropriate protection for the property rights of landlords’ and support investment.

‘Scotland needs a thriving private rented sector’

Housing Minister Paul McLennan said: “There is a consistent view that Scotland needs a thriving private rented sector – one that offers good quality, affordable housing options and values the benefit that investment in rented property delivers.

“This announcement provides certainty for tenants and continues to encourage investment.

“Setting out the form of the rent cap in this way – with CPI as the basis – allows for a reflection of the costs to landlords of offering a property for rent whilst offering protection for tenants in terms of limiting more significant rent increases.”

He adds: “We are bringing forward a system of rent control that works for Scotland – a system that supports stabilisation of rents for tenants, whilst ensuring there can be a balanced approach that provides appropriate protection for the property rights of landlords and supports investment in the development of rented homes.”

Landlords and investors are vital

Propertymark’s head of policy and campaigns, Timothy Douglas, said: “Whilst the Minister is beginning to recognise that landlords and investors are vital to solving the housing crisis in Scotland, and inflation-linked rent increases will support investor appetite, further changes are still needed to strengthen the legislation and give more confidence to letting agents and their landlords.

“The Bill, in its current form does nothing to address the demand for private rented property and the proposals for rent control areas, in terms of data collection, designation and reporting timescales are inconsistent.”

He added: “Furthermore, rent control measures between tenancies removes any incentive for landlords to invest or upgrade properties and the Scottish Government must reduce the tax burden on landlords to bring down the cost of renting for tenants.”

‘Rent controls are normal’

The Green Party’s equalities spokesperson, Maggie Chapman, said: “Everyone deserves a safe, warm home that gives them peace of mind and security, and we have so much more to do if we are to give tenants the rights and protections they deserve.

“Rent controls are normal in many countries – they exist across Europe and beyond.

“It is time for them to be introduced in Scotland.

“The SNP must not betray tenants or backtrack on the commitments they made three years ago.”

She adds: “By tackling sky high rents, ensuring protection from eviction, providing the rights to decorate and to keep pets, and providing greater support for victims and survivors of domestic abuse rebuilding their lives, we can build a fairer and better housing system.”

Offers landlords a degree of hope

David Alexander, the chief executive of DJ Alexander Scotland, said: “This is welcome news. Everybody involved in the private rented sector (PRS) has been frustrated at the uncertainty of the Scottish government’s policy on rent controls, but this amendment offers landlords and investors a degree of hope for the future.

“Most would agree that rent increases capped at CPI+1% up to a maximum of 6% is a fair offer and would allow landlords to plan for the future with a greater degree of certainty.”

He added: “Although there is to be further consultation next year – which sounds unnecessary given how much these issues have already been discussed – this is a change which, if approved in the final stages of the Bill, should free up investment and start to resolve the current housing crisis.”

Share This Article