The exemptions regime must be balanced and avoid giving large institutional Build to Rent investors a competitive advantage over traditional landlords, who provide the majority of rented homes in Scotland. As of April 2024, 74.9% of Scotland’s 238,094 registered private landlords owned just one rental property.
The necessity for exemptions shows that the rent control provisions will hinder investment and supply. Restrictions on setting rents between tenancies will particularly discourage investment in older properties, leading to disrepair.
Incentivising improvements
In the event of a Rent Control Area coming into force, it is vital that landlords can raise rents above the cap where they have undertaken significant capital expenditure or non-routine maintenance. This includes energy efficiency upgrades, structural works, and improvements that demonstrably benefit tenants.
Housing Plan fails to address crisis in rented sector
The Scottish Government has published its Tackling Scotland’s Housing Emergency strategy, renewing efforts to bring empty homes back into use, boost affordable housing delivery, and tackle issues such as damp and mould. While some measures have been applauded, the plan fails to address urgent problems in the social and private rented sectors, as well as the pressing challenges facing Scotland’s housing market.
Landlords should be able to reset rents at the beginning of a new tenancy where the previous rent was significantly below market value, to ensure fairness and sustainability.
Evidence, enforcement and fairness
Propertymark does not support a system where landlords must seek prior approval for rent increases above the cap, warning it would create administrative backlogs in local authorities. Instead, landlords should be able to increase rents on a cost-recovery basis and provide evidence only in the event of a tenant challenge, with a publicly accessible register ensuring transparency.
On joint tenancies, our members raised concern that new proposals place no obligation on remaining tenants to find replacements, leaving them at risk of unlawful occupation. A clear, standardised process for notices, communication preferences set out in tenancy agreements, and safeguards for cases involving relationship breakdown or domestic abuse are recommended.
Ongoing lobbying
Ahead of Stage 3 of the Bill, Propertymark has already conveyed concerns directly to the new Housing Minister, Màiri McAllan MSP, and met with officials at St Andrew’s House to progress possible amendments.
There remains frustration amongst Propertymark members that the only option the Scottish Government are proposing to make the private rented sector more affordable is to introduce rent control.
The necessity for exemptions demonstrates an acknowledgement that the rent control provisions would hinder investment. Private landlords provide the vast majority of rented homes in Scotland and must not be competitively disadvantaged against large institutional investors.
“In the event of a Rent Control Area coming into force, it is vital that landlords can raise rents above the cap if they have undertaken significant capital expenditure and non-routine maintenance to incentivise ongoing improvements and upgrades to private rented homes.
