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Missed opportunity to solve the housing crisis
Propertymark’s members are frustrated that, despite Scotland’s severe shortage of rental homes, the Bill focuses on rent controls rather than increasing housing supply. With Local Housing Allowance (LHA) rates frozen, punitive taxes on landlords, and the Additional Dwelling Supplement now at 8%, the Scottish Government has not introduced policies to incentivise investment in the Private Rented Sector (PRS).
Rent controls raise more questions than certainty
The Bill’s rent control measures, capping increases at CPI plus 1% (up to a maximum of 6%), were acknowledged as providing greater clarity and consistency. However, Douglas warned that rent caps must remain flexible to accommodate inflation and the rising costs of energy efficiency improvements.
He also cautioned that restrictions on setting rents between tenancies could discourage investment, particularly in older properties that require significant capital expenditure to maintain quality standards. There is a risk of large areas of rental stock falling into disrepair, with landlords unable to cover their costs.
Decarbonisation targets out of reach
With a decarbonisation deadline of 2028 looming, stakeholders question whether the 6% cap would allow landlords to afford necessary upgrades, particularly in rural areas where properties are harder to retrofit. The Scottish Government must balance social and environmental goals, particularly in rural areas, to avoid undermining both.
Call for a pilot scheme
To avoid unintended consequences, Douglas recommended piloting the rent control measures to test their impact and called for a full review of the taxes and costs faced by landlords.
Propertymark has long urged policymakers in Scotland to engage with the industry to ensure legislation supports tenants and landlords.
Propertymark campaigning
We have consistently raised concerns about the Housing (Scotland) Bill, including its failure to incentivise new housing development. MSPs have also criticised the Bill for not delivering solutions to increase housing supply or improve the quality of existing stock.
In our reports we highlighted that landlords and investors require continuity and consistency to maintain their role in Scotland’s housing market. Douglas reiterated this point during the evidence session, stressing the need for legislation that creates a fair balance between tenant protection and landlord sustainability.
Our campaigning for policies that address Scotland’s housing crisis comprehensively continues we urge the Scottish Government to refocus on practical solutions that deliver more homes and better outcomes for tenants and landlords alike.
FAQs: Housing (Scotland) Bill
On 26 March 2024, the Scottish Government published the Housing (Scotland) Bill. The Bill is a significant piece of legislation that will have implications for letting agents and their landlords. Here we answer some of the most frequent questions about the proposals contained in the Bill.