Scotland takes ‘huge step’ toward cap on landlords raising private rents

Housing campaigners have hailed a new Scottish Government bill to establish long-term rent control north of the border as a “huge step forward”.

The legislation builds on the temporary cap on increases in private sector rents introduced by the SNP-administration at Holyrood during the cost of living crisis.

With the short-term measure set to end on 1 April, the new bill proposes letting ministers create long-term rent control areas to help private tenants still struggling with their housing costs.

Tenants’ rights groups largely welcomed the proposed changes. But landlords warned that the measures would see property owners flee the sector – squeezing the supply of homes available to rent.

The Scottish Government has not set out any specific percentages for proposed rent caps, but could see a ban on any increase in some parts of the country. The proposals could see local authorities recommend to ministers whether rent control should be imposed in the area.

If control on the private rental sector is allowed in council area, a formula would be applied that could see landlords limited to a particular percentage – potentially as low as zero per cent.

The Housing (Scotland) Bill also proposes that annual rent rises could be capped both during tenancies, and in between tenancies, when homes are put back on the market.

Aditi Jehangir, secretary of Living Rent tenant’s union, called the bill a “huge step forward for tenants”.

The campaigner said it included “key measures that we have been fighting for, such as rent controls that apply between tenancy, the ability to cap increases at zero per cent, rights for joint tenants to leave and the right to have pets and redecorate”.

She added: “If passed, these will have a huge impact on tenants’ lives, ensuring that we have homes that we can actually call ours.”

Jehangir expressed concern the bill could be watered down though.

John Blackwood, chief executive of the Scottish Association of Landlords, said the ambitious legislation would only “exacerbate” the housing crisis.

“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,” he said.

The Scottish Government imposed a 3 per cent annual cap on any increases in the private rental sector as a temporary measure in 2022, with the move set to come to an end next week.

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Some property experts have argued the experiment has backfired. Landlords have continued to push up prices on newly advertised properties, which were not subject to the controls.

A Zoopla report from earlier in March found Scotland’s rents had risen 11.6 per cent in the past year – higher than the UK average of 7.8 per cent.

Alongside changes to the private sector rents, the bill offers new protection from eviction. It proposes a new duty on public bodies – including councils, NHS and the police – to take steps to make sure people do not become homeless.

The housing charity Shelter Scotland warned that the plans would not solve the “systemic issues”, such as the lack of social housing.

Director Alison Watson said there was “no realistic prospect” that local authorities would do more to stop homelessness, saying many already failed to provide suitable accommodation for the most vulnerable.

Patrick Harvie, the Scottish Government’s minister for tenants’ rights, said that a “fairer, well-regulated” rented sector is “good for both tenants and landlords”.

Scottish Labour said the new housing bill was “half-baked”. The party’s housing spokesman Mark Griffin said it “does not offer enough to tackle homelessness, is slow to help renters, and has done nothing to properly encourage affordable home building”.