The Scottish Government has proposed an amendment to the Housing (Scotland) Bill to regulate rent increases.
- The proposal suggests capping rent increases at the Consumer Price Index (CPI) plus 1%, with a maximum of 6%.
- The rent cap will apply in areas with existing rent controls and is pending Parliament’s approval.
- The amendment aims to stabilise rents while supporting landlords’ property rights and encouraging investment.
- A consultation in Spring 2025 will discuss exemptions and higher caps in certain conditions.
The Scottish Government has put forward a proposal to amend the Housing (Scotland) Bill, aiming to regulate rent increases in selected regions with rent controls. The proposed regulation intends to limit rent increases to the Consumer Price Index (CPI) plus 1%, capping at a maximum of 6%, pending the approval of the Parliament. This legislative change is intended to apply to both mid-tenancy and between-tenancy rent hikes.
The initiative seeks to stabilise rental prices, offering much-needed support to tenants while simultaneously safeguarding the property rights of landlords and stimulating investment in the housing sector. The Scottish Housing Minister, Paul McLennan, highlighted the reforms as part of a broader strategy to ensure accessible, safe, and affordable housing, thereby contributing towards the eradication of child poverty. He remarked that securing affordable housing plays a pivotal role in addressing the housing emergency and achieving governmental priorities.
Paul McLennan further explained that anchoring the rent cap to the CPI allows for a reflection of landlords’ operational costs while offering protection to tenants against substantial rent hikes. The plan is to create a balanced system of rent control that benefits both tenants and landlords by stabilising rents and providing adequate protection for landlords’ property rights.
In addition to the rent cap measure, the government plans a consultation in Spring 2025 to solicit views on how exemptions to rent controls might be managed and how increases beyond the established cap could be authorised by Scottish Ministers.
However, not all stakeholders are convinced of the proposed amendment’s efficacy. Timothy Douglas, head of policy and campaigns at Propertymark, acknowledges that while there is recognition of landlords’ importance in addressing the housing crisis, the current Bill falls short in many areas. He asserts that it neglects to adequately support the demand in the private rented sector, while also criticising the inconsistency in data collection, designation, and reporting timelines for rent control areas. Further, he warns that rent control between tenancies could disincentivise property investment and upgrades, calling for a reduction in the tax burden on landlords to help decrease rental costs for tenants.
The proposed rent cap amendment by the Scottish Government seeks a balanced approach to stabilise rents, protect tenant rights, and encourage investment.
