Propertymark expresses concerns over Scottish rent control policies

Propertymark has voiced significant concern following the recent Judicial Review’s endorsement of the Scottish Government’s move towards implementing rent controls in the private rental sector.

Despite Propertymark’s advocacy and legal challenges against the policy, deemed by many to be harmful to the sector’s health, the courts have given the green light for its commencement.

Initially, a rent freeze on existing tenancies was introduced in September 2022 and legislated the following month, aiming to protect tenants from evictions due to rent hikes.

The unfolding scenario, however, has shown potential drawbacks, particularly the disincentive for landlords to invest in quality, safe housing—a resource in dire need.

The review process saw Propertymark at the forefront, challenging the legality of the proposed rent control laws and their disproportionate impact on the relationship between tenants and landlords.

In January 2023, Propertymark led the petition to the Court of Session in Edinburgh, contending that the new laws could infringe upon the European Convention of Human Rights.

A notable shift in the Scottish Government’s stance occurred on 1 April 2023 with the introduction of a rent cap, allowing increases of 3-6%, as stipulated by the Cost of Living (Tenant Protection) Act 2023—seen as a moderation from the initial rent freeze approach.

The ripple effect of Scotland’s decision has stirred debate in England, with comparisons drawn and decisions weighed. However, Secretary of State for Levelling Up, Housing and Communities Michael Gove has elected not to emulate the Scottish model.

The impact of the Scottish Government’s rent control measures has yet to yield positive outcomes, as evidenced by a significant 13.7% annual increase in rents across Scotland as of Q3 2023, with averages reaching around £1,115 per month.

The sector faces the potential departure of landlords, a development whose full implications remain to be seen, pending further data from the forthcoming Scottish Housing Survey.

Nathan Emerson, CEO of Propertymark, shared his concerns: “Propertymark are enormously disappointed and concerned at today’s outcome from the Judicial Review regarding rent controls across Scotland.

“The private rented sector is a crucial provider of housing and has been incredibly let down by a clear lack of understanding which is now driving good landlords away from the private rented sector.

“The economics of providing high quality homes is becoming alarmingly unviable.”