Housing Minister announces amendment to proposed rent controls
The Housing Minister, Paul McLennan, has today announced in parliament that an amendment will be made to the rent control proposals set out in the Housing (Scotland) Bill which is currently being considered by parliament.
To provide certainty on how rents will be capped within rent control areas (RCAs), an amendment will be made to the Bill to set out that rents within RCAs would be capped at the level of the Consumer Prices Index (CPI) plus 1% up to a maximum increase of 6%.
This would mean that in most cases rents in a RCA would be able to increase by CPI + 1% of the existing rent. Where the relevant CPI figure exceeds 5% then the increase permitted would be capped at 6% of the existing rent. So if CPI was 3% then rents within a RCA could be increased by 4%. If CPI was 8% then rents within a RCA could be increased by 6%. The rent cap is proposed to apply to rent increases both during the term of a tenancy and in between tenancies, but only within RCAs which would be designated by Scottish Ministers if they consider it “justified and proportionate” based on assessments carried out by local authorities.
SAL has been lobbying for an amendment to provide certainty on how rents would be set as the original Bill wording did not provide any clarity on this leading to fears the legislation could be used to freeze rents by capping increases at 0%. Whilst we are pleased to see some certainty being introduced, we still have serious concerns about the impact that rent controls will have on the sector.
The Minister also announced that a consultation would be published in Spring 2025 to seek views from landlords and tenants on how the regulation making powers in the Bill, that allow for certain types of property to be exempted from rent control and for rents to be increased above the level of the rent cap in some circumstances, may be used.
SAL will continue raise concerns with the government and MSPs about the damaging effects of rent control on the supply, quality and affordability of properties in the sector. We will lobby MSPs for amendments to be put forward in the next stages of the Bill’s progress through parliament. SAL chief executive, John Blackwood, has a meeting with the Housing Minister tonight to discuss members’ concerns.
For a summary of the provisions of the Bill as originally published, click here.
The likely timescales for the introduction of the proposals set out in the Bill are as follows:
Bill stage 1 (during which MSPs decide whether parliament agrees with the general principles of the Bill) – complete November 2024
Bill stage 2 (during which MSPs can propose and vote on amendments to the Bill) – complete by early 2025
Bill stage 3 (during which final amendments are proposed/considered and parliament votes on whether the Bill should become law) – complete by late spring 2025
Bill receives Royal Assent (becomes an Act of parliament) – summer 2025
Secondary legislation to set out the finer details of how the measures will operate then needs to be published and considered by parliament – this is likely to take place during 2025-2026.
The earliest date for provisions to come into force in the private rented sector is likely to be some time during 2027-2028. Different provisions are likely to come into force at different times. Some rent control areas could be designed in 2027 if local authorities have data to support their introduction. Provisions on pets/personalisation may take longer as they are expected to require more consultations on secondary legislation/guidance – so may not come into force until 2028.
The above timescales are just best guesses at this stage and there are many factors which could affect the progress of the legislation. It should also be recognised that at any stage of the Bill’s progress through parliament amendments can be made to the provisions in the Bill, with measures potentially being added, removed or significantly altered.
SAL will keep members updated with the progress of the Bill, so keep an eye on our enews updates.
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