Consultation on nationwide cap on rent increases
Scottish Labour MSP Pauline McNeill has published a consultation on introducing a Member’s Bill in the Scottish Parliament to place a blanket restriction on private rented sector (PRS) rent increases. The current Rent Pressure Zone (RPZ) legislation is considered unworkable by some as there is a lack of data on mid tenancy rent increases which is needed for a local authority to make an RPZ application.
The consultation paper, which can be read here, proposes the following:
- a nationwide cap on PRS rent increases set at CPI + 1% (with CPI being measured over a 12 month period to September each year)
- the cap would apply to rents charged not only to existing tenants but also to any new tenants, e.g. if a property had previously been rented for £400 per month and was being re-let to new tenants two years later, and if CPI had been 3.5% over that two year period, the maximum rent chargeable at the start of the new tenancy would be £418 per month, an increase of 4.5%
- properties new to the market (which had not been let before) would not be subject to any restriction on the initial rent charged
- landlords could apply to a rent officer for a larger increase than CPI + 1% if they had carried out substantial improvements to the property
- tenants could appeal a rent increase in the same way as at present but the body setting the rent would not be able to raise it above what the landlord had proposed (as they can at present)
- to create a comprehensive database of rents, landlords would be required to input details of the rents they charge each time they renew their landlord registration and update the system when they change the rent.
SAL chief executive John Blackwood had a constructive meeting with Pauline McNeill today (6 June 2019) to discuss her proposals. John raised concerns about the potential for negative and unintended consequences of the proposals including higher and more frequent rent increases. Also discussed was the need for measures to improve data on mid tenancy rent increases which will allow the extent of the alleged problem to be better understood and RPZ applications to be submitted where rent increase data supports this. Ms McNeill is keen to meet with SAL members to better understand their views and members should let us know if they are interested in taking up this offer.
SAL will submit a formal response to the consultation in due course. We encourage all members to submit their own responses to the consultation with their views and email us a copy of their responses, which will help to inform the response that SAL submits on behalf of its members.
An analysis of the consultation responses will determine the next steps, which may involve a Member’s Bill being introduced in Parliament. This would need to win the support of a majority of MSPs in order to become an Act.
It is worth noting the usual timescale from publication of a Bill to any resultant legislation coming into force in Scotland is at least two years. We will keep members informed as usual of this situation as it develops.