Balance struck for rent control amendment but more landlord support needed in Scotland

Two industry bodies claim while a balance may have been struck for rent controls in the Scottish Housing Bill, the policy still needs to be tested.

The Stage 2 amendment in the Scottish Housing Bill proposes that rent caps will be linked to inflation, with increases based on the Consumer Price Index plus 1%, up to a maximum of 6%. The Scottish government describes this as a compromise designed to protect tenants and safeguard landlords.

Despite the amendment, Propertymark and the Scottish Association of Landlords argue rent controls are still not the best policy to tackle the housing crisis.

Widespread frustration and bewilderment

Timothy Douglas, head of policy and campaigns at Propertymark, said: “There is still widespread frustration and bewilderment across the private rented sector that despite the shortage of homes to rent, the housing emergency and punitive taxes on landlords by raising the Additional Dwelling Supplement (ADS) from 6% to 8% in the Scottish Budget.

“Despite all this, the only policy intervention from the Scottish government to tackle housing affordability is still rent controls.”

Mr Douglas adds Propertymark welcomes the clarity around rent controls in the Scottish Housing Bill but more work needs to be done to support landlords in Scotland.

He said: “Rent increases capped at CPI+1% up to a maximum of 6% within a rent control area does provide clarity because it means that the legislation will be amended so rent control area caps will be provided in a more consistent way across the country.

“Whether it provides full certainty for all landlords is difficult to say but, on the whole, it would allow agents and landlords to plan for the future under this legislation with a greater degree of certainty.

“This being said, further amendments are needed and Propertymark continues to urge the Scottish government to remove the application of rent controls between tenancies, commit in the legislation to a review of all taxes and costs impacting private landlords, and ensure that the periodic assessment of rent conditions by local authorities are more consistent and Scottish Ministers are held to account via statutory reporting timescales.”

Encourage investment in PRS

John Blackwood, chief executive of the Scottish Association of Landlords (SAL), echoed Mr Douglas’s comments, adding that while a balance had been struck, SAL would prefer no rent controls and for market forces to dictate rent prices.

Mr Blackwood also pointed out that the majority of landlords in Scotland have tenants paying considerably less than the market rate.

He said: “From a SAL survey, 60% of landlords said their tenants are paying below market rents. We know there’s a substantial market paying well below the market, and we need to keep up with inflation. If a landlord hasn’t increased rents in a long time, then we need to add on that +1%.”

Mr Blackwood adds the Scottish government needs to do more to encourage investment in the private rented sector.

He said: “We need to reassure investors and keep landlords in the market and not have punitive legislation.”

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