The revised proposal now incorporates a cap on rent increases linked to the Consumer Price Index (CPI), with a maximum increase of 6%. This adjustment addresses concerns raised by housing providers regarding the impact of rising costs on their operations.
SLE believes that this revised approach strikes a balance between protecting tenants and ensuring the sustainability of the private rented sector.
Anna Gardiner of Scottish Land & Estates said: "The Scottish Government has acknowledged the value of the private rented sector as a key housing provider, which is welcome. Offering a suitable environment that incentivises homeowners to improve and expand the housing stock is important for both landlords and tenants. In rural areas this is absolutely crucial.
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"While the proposed amendment does not remove the rent control measures, it goes some way to at least ensuring that those with properties in rent control areas will now be able to increase rents to a degree and reflect inflation.
"Investment in the private rented sector is beneficial for tenants as it means better quality housing and more homes being made available as rental properties. We would urge the government to clarify where exemptions may apply and to engage with the private rental sector to reduce unnecessary cost and bureaucracy."
A key concern that remains is the fact that the rent cap will apply to rent increases both during the term of a tenancy and in between tenancies, so in rent control areas when a new tenancy is about to be agreed, the rent will not revert to the market rates but will remain at the level set by the government. The flaw is that there is a built-in assumption that at the outset of the legislation all rental properties will be subject to rents broadly in line with the open market rental value.
The Bill does allow for certain types of property to be exempted from rent control and for circumstances where rents may be increased above the level of the rent cap. However, detail of this is not included in the Bill and will be set out in regulations to follow. In such cases it is essential that unnecessary cost is avoided and bureaucratic delay does not lead to extended void periods. This will squeeze the supply of rental property and will leave tenants in a worse position.
A consultation on how exemptions may be applied will be brought forward in early Spring 2025. Scottish Land & Estates said it is important that this consultation is framed appropriately.
