Landlords face the very real prospect of being banned from increasing rents in Scotland for up to five years under plans proposed by the Scottish government.
The move to bring long-term rent control to Scotland has led to concern from industry leaders that buy-to-let landlords will be deterred form investing in the property market north of the border, thus reducing the supply of much-needed rental stock.
Patrick Harvie, the Green MSP and tenants’ rights minister, introduced the measures in the Housing (Scotland) Bill alongside Paul McLennan, the housing minister. It includes proposals for long-term rent controls that would put a cap on prices for tenancies. The measures come at a time when rents in Scotland are rising faster than almost any other country in Europe.
Local authorities will be able to apply to Holyrood to ask for permission to designate a rent control zone. The bill notes that this could mean no price rises in the area and a regulation period that would last for up to five years before being reviewed.
Other parts of the Scottish bill include the right for tenants to keep pets and to decorate their homes, while there will also be stronger protection against eviction.
Harvie 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.”
David Melhuish, director of the Scottish Property Federation, described the legislation as a “disappointment” for anyone seeking to bring Build to Rent properties to Scotland as there was a lack of clarity on many elements.
He said: “There is no solution to the housing crisis that does not involve greatly increasing the supply of new homes across for sale and rent.
“Should the legislation be approved by the Scottish parliament unamended, we risk repeating the damaging effects of the emergency rent freeze legislation passed in 2022 when investment for Scottish rental housing was frozen, deterred or diverted to projects outside of Scotland.
“We estimate that there is currently between £2.5 billion and £3 billion of investment now at risk that could deliver quality new homes for rent in Scotland.”
David Alexander, chief executive of the property group DJ Alexander, commented: “Once again rent control areas are being proposed without evidence that they have ever worked anywhere in the world.
“The recent experience in Scotland of the rent cap introduced in October 2022 has resulted in unprecedented demand and rents rising at their fastest ever rate, and a housing sector that is in crisis with four local authorities having said they were experiencing a housing emergency.
“It is unlikely, therefore, that this will work in practice, and it certainly won’t be beneficial to tenants. Crucially it also ignores the fact that landlords, property investors and corporate institutions have the very real option of relocating elsewhere or of simply walking away from the sector.”
Timothy Douglas, head of policy and campaigns at Propertymark, added: “The measures will do nothing but add extra burden on landlords and local authorities with no additional reward for tenants at a time when resources and finances are under extreme pressure.”
