Housing professionals have little time left to provide on-the-ground knowledge and voice their opinions on the Scottish Government’s plans to introduce a system of long-term rent controls for the private rented sector.
Alongside rent control, the Scottish Government proposes, as part of its New Deal for Tenants, to strengthen tenant protections during the eviction process, enshrine the right to personalise a rented home, and make it easier for a tenant to request to keep a pet.
Cabinet Secretary for Social Justice, Housing and Local Government, Shona Robison MSP, states in her foreword to the draft strategy paper that the reforms are integral to delivering Housing to 2040. This is the Scottish Government’s long-term housing plan published in March 2023 and includes a goal to improve accessibility, affordability and standards across the rented sector.
Propertymark’s research shows that the biggest reason landlords give for selling rental properties is rising costs which will then be exacerbated if rent controls are introduced, and their rental income is cut or frozen. We also know that as many as half of the properties sold by landlords do not return to the rental market, meaning a further decline in already worrying stock levels.
Propertymark has long said that the best way to maintain affordability is to have enough homes to rent, privately and in the social sector. The Scottish Government must therefore ditch this rent control agenda and focus its efforts on delivering the quota of new housing across all tenures.
Under the proposals, local authorities will be asked to carry out assessments of rents in their area and make recommendations to MSPs about whether to impose rent controls in a part, all the whole of that area. However, this would need to be consulted on by the local authority and representatives of landlords and tenants before introduced with the final decision being made by MSPs.
The controls would restrict the amount rents could be increased either by adding a rent cap based on a fixed percentage or a formula that could be used to calculate the increase and would apply both to increases during a tenancy and to the rent set for a new tenant.
The Scottish Government now proposes that rent increases in areas where rent controls are in place would be limited to one increase per property in any 12-month period, even if the tenant changes within that time.
The Scottish Government acknowledges that this may result in the rent being increased early in a tenancy depending on when the earliest date of increase arises and says it is considering exceptions to rent caps, for example when a landlord has invested in certain improvements to a property.
‘New to market’ tenancies would also be exempt from controls under certain circumstances, including:
- The first tenancy of a property that has not been let as a principal home before.
- The first tenancy of a property following its purchase with vacant possession by the current landlord.
- The first tenancy of a property that has been empty for a prolonged period.
- The first private residential tenancy of a property where the previous tenancy was a regulated tenancy under the Rent (Scotland) Act 1984
Courts and tribunals will also have the power to delay evictions which would apply to all types of tenancies, in both the private and social rented sectors.
If introduced, both the First-tier Tribunal for Scotland (Housing and Property Chamber) and the Scottish Courts, where an eviction order/decree is granted, would be able to consider whether a delay to the enforcement of that eviction should occur due to the circumstances of the case.
Propertymark is urging professionals to join them in speaking up for the industry by responding to the consultation which closes on 27 October 2023.
The consultation can be found here.
Despite the questionnaire not giving the option for the sector to say “no” to rent control, written responses should be sent to the Scottish Government via housing.legislation@gov.scot
