The latest bid by politicians to introduce rent controls has been widely condemned by experts.
The Housing (Scotland) Bill passed its first stage in the Scottish Parliament at the end of last week, despite industry criticism that it was half-baked and did not contain solid proposals to increase housing supply north of the border.
Instead it contains substantial measures seeking to introduce private rent controls, provoking the Scottish Property Federation (SPF) to reiterate its claim that the Bill still fails to adequately acknowledge and address the fundamental challenge facing the private rented sector – an inability to balance supply with rising demand for rented homes.
The SPF argues there is now a need to rebuild investor confidence in Scotland. This has plunged over the last 12 months as evidenced by a 45% reduction in Build To Rent construction between October 2023 and October 2024.
SPF director David Melhuish says: “The fundamental challenge for the private rented housing market in Scotland remains the lack of new investment and availability of homes to rent. Put simply there is a huge imbalance in the market with too much demand for too few homes. T
“To address this the government needs to go further to restore investor confidence in Scotland and to unlock at least £2.5bn in direct investment, kick start some 15,000 homes at various stages of planning, and even more added value for the wider economy.
“While we support proposals to boost critically needed new modern homes for rent of all tenures and we believe the proposals for consulting on the Bill’s framework powers for exemptions from the rent control regulations must be addressed to encourage and facilitate new housing investment for Scotland, given that at least £500m of investment could already have been lost as the policy of rent controls has been formed.
“Of particular concern remains the application of rent controls on empty properties in between tenancies. This part of the Bill must be reconsidered if we are to restore investor confidence and begin to address the housing shortfall.”
And Propertymark’s head of policy and campaigns – Timothy Douglas – says: “Rent controls are not the answer to tackle the housing emergency in Scotland. Increasing the supply of homes to rent, reducing landlord costs and removing the tax burden to buy a property to let will make renting more affordable for tenants.
“Furthermore, the proposals and details for rent control areas in the Bill are limited at best, and offer no clarity for existing agents working with landlords or for new would-be landlords thinking of entering the sector.
“Significant amendments to the legislation are needed if the Scottish Government want to raise property standards and make renting more affordable.
“This must include removing the application of rent control measures between tenancies in order to allow upgrades such as redecorating, replacing furniture, or installing energy-efficient measures to take place.”
Propertymark claims that previous policy decisions by the Scottish Government have led to skyrocketing rents, with the average monthly rent in Scotland increasing 7.2% to £973 in the 12 months to September 2024.
In its New Deal for Tenants, the Scottish Government talked about affordable rents, the supply of rented homes, and raising standards. However, Propertymark insists the legislation does very little to increase the supply of private rented homes and only offers rent control as the solution to improve affordability for renters.
The body states: “Rent levels are high because there are too many people who have to rent, and not enough homes available. Rents can only be reduced sustainably by increasing the overall supply of all types of homes, so that more people can get a social home or buy their own with a mortgage, and fewer private renters have to compete over each available home.”
