Housing (Scotland) Bill passes stage 1

The Housing (Scotland) Bill, published in March, has passed the first stage of its progress through parliament. The Bill seeks to introduce long-term rent controls which would apply within rent control areas designated by the government. It also seeks to introduce greater rights for tenants to personalise their home, obtain permission for a pet and end a joint tenancy where there is disagreement between the tenants about ending the lease.

In a lengthy debate in parliament on 28 November, 83 MSPs voted to progress the Bill to stage 2 of the parliamentary process, 31 voted against it and there were 4 abstentions. Voting was along party lines with SNP, Labour and Green MSPs voting for the Bill, Conservative and Alba MSPs voting against it and Liberal Democrat MSPs abstaining.

During the debate, Housing Minister Paul McLellan stated that the principle of introducing rent controls has broad support in Scotland, with recent YouGov polling showing that 82 per cent of respondents supported their introduction.

He also reiterated that in spring 2025, there would be a public consultation to seek views on how powers to exempt certain types of property from rent controls could be used. The consultation will include consideration of how new housing that is built or developed specifically for private rent, including for mid-market rent, would be treated and of the circumstances in which rents might be increased above the level of the rent cap.

In the run up to this debate, the Housing Minister attended SAL’s Scottish Letting Day at Murrayfield on 19 November during which he addressed attendees’ questions about the government’s approach to the private rented sector. He stated that he wants to encourage investment in the sector and he acknowledged that landlords need to see a return on their investment.

The Bill has to go through two further stages of parliamentary scrutiny/voting before it becomes law. During these stages, amendments can be proposed to the wording of the Bill. SAL will continue to lobby for changes with a focus on raising concerns and proposing amendments to remove or relax between-tenancy rent controls. Although these would only apply in areas designated as rent control areas, we believe they will be hugely damaging to the sector, leading to disinvestment, upward pressure on rents for properties excluded from controls (such as those new to the market), a distorted rental market and poorer quality homes. SAL has already been successful in persuading the Minister to agree to amend the Bill at stage 2 to allow for rent increases to be permitted at the level of the Consumer Prices Index (CPI) plus 1% up to a maximum increase of 6% (the original wording allowed rents to potentially be capped at 0%).

If the Bill is approved by parliament, then further secondary legislation needs to be introduced to firm up the finer details of how the new requirements will operate in practice. It is unlikely that the new measures will come into force until around 2026-27.

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