Timothy Douglas, head of policy and campaigns at Propertymark, has said that while the Scottish Government has achieved a balance with rent control measures, the policy has yet to be properly tested. Douglas made the remarks during an evidence session to the Scottish Parliament’s Local Government, Housing and Planning Committee today, 28th January 2025, as part of the ongoing consideration of Stage 2 amendments to the Housing (Scotland) Bill.
The Housing (Scotland) Bill, introduced on 26th March 2024, proposes mandatory rent level assessments by local authorities at least once every five years. It also grants Scottish Ministers the power to implement rent controls and set limits on rent increases. The legislation is currently at Stage 2, prior to the final legislative stages of Stage 3 and Royal Assent.
Scotland’s Housing Minister, Paul McLennan, previously stated that rent caps would be linked to inflation. During the session, it was confirmed that these caps would be set at the Consumer Price Index (CPI) plus 1%, capped at a maximum of 6%. Douglas acknowledged that this approach provides a clearer framework for landlords, stating: “Rent increases capped at CPI+1% up to a maximum of 6% within a rent control area does provide clarity because it means that the legislation will be amended so rent control area caps will be provided in a more consistent way across the country.”
He added, “Whether it provides full certainty for all landlords is difficult to say but, on the whole, it would allow agents and landlords to plan for the future under this legislation with a greater degree of certainty.”
However, Douglas raised significant concerns over the broader implications of rent control measures, particularly in the context of a shortage of homes to rent and the wider pressures facing landlords. He pointed out the impact of high taxes, such as the 8% Additional Dwelling Supplement, which could cost landlords over £15,000 based on the average property price in Scotland.
“There is widespread frustration and bewilderment amongst Propertymark members that despite a shortage of homes to rent, the housing emergency, a freeze in Local Housing Allowance rates, and punitive taxes on landlords, the only policy intervention to help tackle affordability remains to introduce rent control,” Douglas said.
He argued that restrictions on adjusting rents between tenancies could deter investment, particularly in older properties requiring substantial maintenance. “The gap between tenancy agreements is normally when a landlord will incur potentially significant capital expenditure in redecorating and upgrading their properties in readiness for a new incoming tenant,” he explained.
Douglas called for a pilot programme to assess the impact of rent controls before implementing a universal policy, highlighting the need for regional affordability considerations. He also urged a review of the taxes and costs impacting private landlords, suggesting that these were deterring buy-to-let investments.
Additionally, Douglas expressed concerns over the lack of statutory reporting timelines for the Scottish Government to provide updates on the private rented sector after receiving rent assessments from local authorities. “Further amendments are needed, and Propertymark continues to urge the Scottish Government to remove the application of rent controls between tenancies, commit in the legislation to a review of all taxes and costs impacting private landlords, and ensure that the periodic assessment of rent conditions by local authorities are more consistent and Scottish Ministers are held to account via statutory reporting timescales,” he said.
