Concerns over proposed rent controls in Scottish housing bill

The Scottish government has published its new housing bill which claims to prevent homelessness and strengthen tenants’ rights.

Proposals in the new bill include bringing in long-term rent controls for private tenancies and new rights to keep pets.

The Scottish Association of Landlords warns the proposals will “exacerbate Scotland’s housing crisis”.

Create rent control areas

The new housing bill could allow Scottish Ministers to create rent control areas and cap rent rises during and in between tenancies.

The Housing (Scotland) Bill will also introduce an ‘ask and act’ duty on social landlords and bodies, such as health boards and the police, to ask about a person’s housing situation and act to avoid them becoming homeless wherever possible.

Other reforms include provisions for helping tenants experiencing domestic abuse and allowing tenants the right to decorate their homes.

Well regulated rented sector is good for landlords and tenants

Tenants’ Rights Minister Patrick Harvie says the new legislation will help create a “healthy private rented sector.”

He said: “A fairer, well-regulated rented sector is good for both tenants and landlords. Tenants benefit from improved conditions and security, while good responsible landlords will thrive when their good practice is recognised by regulation.

“Progressive reform can lead to better conditions and a healthy rented sector overall. I want to keep working with both tenants and landlords to achieve that goal.”

Generation Rent also welcomed the new proposals introduced by the Scottish government.

Ben Twomey, chief executive of Generation Rent, said: “Scotland continues to lead the UK in protecting tenants from unfair and unaffordable rent rises, and this Bill is evidence of what renter campaigns can achieve, with Living Rent deserving a lot of credit.

“The proposed system has the potential to improve the tenant experience in Scotland but it needs to be designed well, so it can be implemented and enforced effectively.”

Rent controls don’t work

However, one letting agency warns the bill will be able to difficult to implement in practice.

David Alexander, chief executive officer of letting agents DJ Alexander Scotland, said: “Once again rent control areas are being proposed without evidence that they have ever worked anywhere in the world.

“Will a designated rent control area be an entire council area, specific areas, and how will councils be able to collate all of the relevant data on tens of thousands of rents if the system is to be able to accurately assess rent levels and rent increases?

“Will cash-strapped councils even have the resources to get this information, pull it together into a report and monitor its implementation?”

The Bill states: “If there was a relevant rent level increase during the period of 12 months before the start of the current tenancy, the initial rent under the current tenancy may not be more than the final rent under the immediately preceding tenancy.

“If there was not a relevant rent increase during the period of 12 months before the start of the current tenancy, the initial rent under the current tenancy may not be more than the final rent under the immediately preceding tenancy as increased by the permitted amount for the area in which the property is situated.”

Mr Alexander adds: “This means that the initial rent is key as increases will only be allowable in designated rent control areas at a level decided by Scottish Ministers and this can include a 0% increase. Why would landlords and investors want to be involved in this?”

Proposals will do nothing to help landlords or tenants

The Scottish Association of Landlords (SAL) warns the new proposals will create chaos for landlords and tenants.

John Blackwood, chief executive of the Scottish Association of Landlords, said: “Despite the hype and promises from the Scottish government, it seems these proposals will do nothing to help either tenants or landlords in the private rented sector.”

“The rent control proposals, as has been seen in places like Ireland which has similar measures, will see reduced investment and more landlords leaving the sector, leading to higher costs for tenants.”

Excaberate Scotland’s housing crisis

Mr Blackwood adds many landlords are fed up with the challenges they face.

“The effects of Scottish government policies in the PRS are already being felt, with rising costs reducing supply and placing more pressure on council and housing association properties that they are struggling to cope with.”

“As landlords have said for a number of years, what is needed is a coordinated plan to build more social housing, encourage more investment in private renting and the building of more owner-occupied homes.”

“The approach outlined in this legislation will exacerbate Scotland’s housing crisis and make it harder for people to have the quality home they deserve, in a place they want and at a price they can afford.”

The bill will now begin stage one scrutiny by a Holyrood committee.

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