Scottish government commits to introducing long-term rent controls
A system of long-term rent controls in Scotland could be introduced, according to the Scottish government's new 2023/2024 programme.
The Scottish government has revealed its Programme for Government 2023/2024 - including a commitment to introduce a system of long-term rent controls to the private rented sector.
What form could a new system of long-term rent controls take?
The government previously proposed introducing an "appropriate mechanism to allow local authorities to introduce local measures, by the end of 2025", in its draft A New Deal for Tenants strategy.
The government plans to consult on proposals for rent controls, but its strategy outlines three of the common "generations" of rent controls:
- A rent freeze on nominal rents
- Regulating rents with an automatic percentage increase based on inflation
- Rent increases controlled during a tenancy, but with no cap between tenancies (as is the case with the current emergency legislation in Scotland)
How could this impact the private rented sector?
The National Residential Landlords Association recently surveyed buy-to-let landlords, and found that 37% said they'd reduce the number of properties in their portfolios if rent controls were introduced.
The Chief Executive of Scottish Association of Landlords, John Blackwood, says: “Any proposal to introduce rent controls must be done in partnership with all parts of the housing sector along with tenant representatives”.
He adds: “This measure should also be viewed as something which addresses short-term concerns until the longer-term measures needed to address Scotland’s housing crisis are implemented and shown to be effective.”
What controls are currently in place in Scotland?
A "temporary" rent cap
A rent freeze on increases for existing tenancies was introduced to the sector in September 2022 - becoming law in October 2022.
This has since transitioned into a rent cap of 3%, in most cases, with some exceptions meaning rents can be increased up to 6% on existing tenancies.
This is part of a package of emergency measures to support tenants during the cost of living crisis, under the Cost of Living (Tenant Protection)(Scotland) Act.
Rent Pressure Zones to cap rents regionally
Local authorities can also apply to obtain "Rent Pressure Zone" (RPZ) status, if they think that rents are rising too much in their local area.
An RPZ means that landlords would have a limit on how much they can increase rents on their existing tenancies. As with the emergency rent cap in place, there would be no limit on how much they can charge tenants on new tenancies.
However, there are currently no RPZs in place in Scotland.
This article is intended as a guide only and does not constitute legal advice. Visit gov.scotfor more information.