The Scottish government has revealed its plans for the next phase of rent control in the country.
Housing Minister Paul McLennan announced that rental increases will be capped at 1% above Consumer Prices Index inflation, up to a maximum of 6%.
The cap will apply between tenancies as well as within them, meaning that landlords will not be able to set rent freely even when they find a new tenant.
The 6% cap also means that landlords could struggle to cover increasing costs if inflation rises above 7%, as it did in 2022 and 2023.
However, under the terms of the Housing Bill the cap will only apply in designated rent pressure zones. The Scottish National Party (SNP) government also plans to exempt certain types of property from the cap, but hasn’t yet decided which types. That will be one of the issues covered by a consultation next spring.
What does the industry think?
According to the government, the rent control system will stabilise rents for tenants while protecting landlords’ property rights and allowing the private rented sector to thrive. But not everyone is convinced.
Propertymark says that rent controls will do nothing to address Scotland’s shortage of homes. They add that landlords will no longer have an incentive to improve their properties.
But some agents have welcomed the proposals, saying that the above-inflation rent cap represents a shift in the right direction. Until the end of March, rent increases were capped at 3% in most cases.
Meanwhile, the SNP’s former coalition partners in the Green Party said that allowing above-inflation rent increases fails tenants. Their statement further warned the government not to give in to the “landlord lobby”.
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