Scotland’s rent control plans slammed by property expert

A leading property firm has blasted the Scottish Government’s new rent control plan as costly and ineffective.

David Alexander, the chief executive of DJ Alexander, Scotland’s largest lettings and estate agency, said the plan would not help tenants or landlords.

The plan will see rent increases being limited when the Cost of Living (Tenant protection) (Scotland) Act 2022 expires at the end of March.

The plan suggests that rents should be based on the lowest of three options: open market rent; a landlord’s new rent offer; and a ‘reasonable’ increase calculated from a new taper system using a percentage of market rent.

The taper system would allow a rent increase if the current rent were less than 6% below the market rent, as long as the new rent is not higher than the market rent.

If the market rent is 20% or 30% above the current rent, the increase would be capped at 10% or 15% respectively.

‘Current consultation is aimed at avoiding a cliff edge situation’

Mr Alexander said: “I appreciate that the current consultation is aimed at avoiding a cliff edge situation when the current legislation ends at the end of March.

“The problem is that intervening in the market over the last 18 months has not produced any benefits for tenants but has actually been detrimental to their interests.”

He added: “The latest Scottish Government data shows that between 2010 and 2022 rents in two-bedroom properties rose above inflation in only four areas out of 18 with Glasgow and Edinburgh being the two biggest risers and the Scottish average below inflation.

“One year on and six areas of Scotland have increased above inflation and the average for the country as a whole is now higher than the consumer price index.”

‘Average rents have increased in all sized properties’

He continued: “In the last year alone, average rents have increased in all sized properties ranging from 11.7% for one-bedroom to 14.3% for two-bedrooms.

“Every type of property has had a double digit increase in rents since the Cost of Living legislation was introduced in October 2022 exceeding the annual average increases in rents over the previous 12 years by a factor of at least three.”

Mr Alexander says that the Government’s market intervention has seen tenants pay more in rents than they would have had no intervention taken place.

He points out that the proposal of giving a 6% increase is more than the historic annual increases have been and this would be extremely difficult to monitor and implement.

‘The market value of the rent of every property’

Mr Alexander said: “Deciding the market value of the rent of every property would be almost impossible to do.

“Different streets adjacent to one another will have different market values, while Edinburgh and Glasgow are completely separate markets to the rest of Scotland.

“Rural and urban areas are not the same. Volumes are not the same, seasonality can play a part in rent levels rurally in a way they wouldn’t in a city or town location.”

He adds: “The number of variables involved means that this would require an enormous team of people to work on it and even then, it would be doubtful if it worked.”

Mr Alexander also criticised the consultation paper as ‘a further attempt to impose controls on the market which are unnecessary. This policy would be costly to implement, unwieldy and ineffective.’

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