The Scottish Government has announced a new inflation-linked rent cap in its Housing Bill in a bid to balance supporting tenants with protecting landlords’ property rights.

Rent increases would be limited to the Consumer Price Index plus 1%, up to a maximum increase of 6%. If approved, the rent cap would apply to rent increases both during and in between tenancies and only in areas where rent control is applied.

Although it remains committed to delivering long term rent control, it recognises that the rented sector is a critical part of Scotland’s overall housing system and says this amendment “allows for a reflection of the costs to landlords of offering a property for rent while offering protection for tenants in terms of limiting more significant rent increases”.

Confidence

However, Propertymark believes that further changes are still needed to strengthen the legislation and give letting agents and landlords more confidence.  

Timothy Douglas (picutred) head of policy and campaigns, says in its current form, the Bill does nothing to address the demand for private rented property while the proposals for rent control areas, in terms of data collection, designation and reporting timescales, are inconsistent.

“Furthermore, rent control measures between tenancies removes any incentive for landlords to invest or upgrade properties and the Scottish Government must reduce the tax burden on landlords to bring down the cost of renting for tenants,” adds Douglas.

David Alexander, CEO of DJ Alexander Scotland, reckons the amendment offers landlords and investors a degree of hope. “This is a change which, if approved in the final stages of the bill, should free up investment and start to resolve the current housing crisis,” he adds.

A consultation in the Spring will seek views on how powers that allow exemption from rent controls or rent increases above the cap could be used by Scottish Ministers.