The Bill was introduced on 27 March 2024 and central to the legislation are proposals to require local authorities to assess rent conditions in their area at least once every five years, and powers for Scottish Ministers to introduce rent control areas and place limits on rent increases.
Watch a recording of the Committee session on Scottish Parliament TV →
Rent controls will not increase housing availability
Despite the policy work leading up to the legislation talking about affordable rents, the supply of rented homes, and raising quality standards, the Bill does very little to increase the supply of private rented homes with rent control as the only solution for affordability.
Propertymark members continue to express a clear strength of feeling against rent control. We assert that these proposals should be dropped in favour of other actions to tackle affordability, like ensuring an adequate housing supply that meets increasing demand and tackling existing income and wealth inequalities.
Tax burden impedes improvement
Rising costs are making it financially unworkable for landlords to continue providing homes. If they are pushed out of the sector rents will be driven even higher as demand increases.
The Scottish Government should look at ways to incentivise new landlords and support existing investors, beginning with an urgent review of all taxes implemented by the Scottish and UK Governments that impact private landlords.
Specifically, the 6% surcharge incurred on buy-to-let property under land and Buildings Transaction Tax should be reduced, and the increases in Additional Dwelling Supplement rates, which are stopping investment in the sector, should be immediately reduced, or removed.
No incentive to invest
Clarity, certainty, and consistency are vital to give investors the confidence to enter the market and to maintain their investment. The Scottish PRS is still reeling from the impacts of the Cost of Living (Tenant Protection) (Scotland) Act 2022 (COLA), which introduced a temporary rent cap and eviction ban that eventually came to an end in March 2024.
The Bill could potentially lead to rent freezes in perpetuity, wiping out landlords’ profits and devaluing the property.
There is no supply of new, energy-efficient homes coming into the market. This will lead to ageing stock which landlords can’t afford to improve. As a result, tenants face long queues to get a property, higher rents, and deteriorating properties.
The sector wants to retain tenants, so huge rent increases are not in their interests, however, they must be able to cover costs and raise rents at least in line with inflation.
Proposals must be backed by reliable data
Despite the current rent controls under COLA, Scotland has the highest rents in the UK. Policymakers don’t fully understand how the emergency measures have impacted and played out in the sector. This insight is vital to inform how they introduce further legislation.
During the Committee session, Dr John Boyle, Director of Research and Strategy at Rettie, stated that there isn’t even enough reliable data to be authoritative on the amount of housing stock in Scotland.
The Bill will provide local authorities powers to request information from landlords and tenants about a property and the tenancy. Douglas advised that this should go further and collect the reasons for rent rises, so Scottish Ministers can understand the pressures on landlords which drive increases.
Eviction delays should be thought through
The proposals include requiring the First-Tier Tribunal for Scotland (Housing and Property Chamber) and the Scottish Courts to consider applying a delay to the enforcement of eviction if the cases that warrant it, for example, because of seasonal pressures.
Douglas called for clarity around the rules, so agents and their landlords have more certainty about what to expect. Ministers should also consider how helpful it would be for tenants in arrears to be allowed to accrue more debt during a delay.
Tenant rights to decorate and keep pets
Definition and guidance will be critical to ensure universal understanding and minimise problems. Landlords should be able to take a larger deposit or require insurance protection to guard against the costs of putting a property right at the end of the tenancy.
Where tenants personalise their property, they tend to be more settled and stay longer. However, landlords usually require the property to be returned to its original condition, and the Bill needs to recognise and allow for to reassure them.
Continuing to represent our members
Propertymark will work with sector organisations to build a coalition of support for amendments to improve the legislation and engage with Scottish Government officials to discuss the Bill in detail.
Feedback from Propertymark members is highly valued, and we will work closely with our Regional Executives from across Scotland to focus our campaigning. To provide input, please email [email protected] or contact your Regional Executive.
The proposals in the Housing (Scotland) Bill for rent control areas are inconsistent and will cause confusion, and local authority assessments must do more to produce evidence-based policy outcomes. Linking rent control to inflation and determining areas by street or ward, and ministers working to statutory timeframes when determining rent control areas would help bring more clarity for agents.
Furthermore, to better understand the private rented sector, the Scottish Government must commit in the Bill to review all costs and taxes impacting private landlords and publish an annual parliamentary update on the state of the private rented sector in Scotland.
