Housing chiefs have said rent controls have battered the market, but the measure has been welcomed by tenants' organisations amid "runaway" rents.

There is now concern around plans for permanent rent controls that are set out in the proposed Housing (Scotland) Bill, but it is claimed rent controls can work for both tenants and housing providers.

What are the rent controls that have been in the news?

 

The Scottish Government responded to the cost-of-living crisis and an already struggling rental sector in 2022 by capping mid-tenancy rent increases at 0% and later 3%.

However, the move, while designed as a short-term solution during particularly difficult times, was blamed for having “unintended consequences” on the housing market.

“Despite the cap on mid-tenancy increases, new tenancy rent pressure pushed market rates up in line with England, where no cap existed,” said the National Residential Landlords Association.

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The rent controls in this form ended in April but permanent capping powers are proposed in the new Housing (Scotland) Bill.

What have tenant support organisations said?

 

While groups including the tenants’ union Living Rent have welcomed moves to help householders in the longer term, the industry reports that uncertainty for investors who do not know if it will leave a development in the red has led to billions of pounds worth of build to rent housing being abandoned.

Alison Watson, director of Shelter Scotland, said: "Renters in the private sector in many parts of Scotland are facing runaway costs. Anything which can put the brakes on is to be welcomed. There’s a lot of detail missing in the Bill, but if implemented properly rent controls have the potential to offer tenants protections and improve affordability across the sector."

The NRLA said: "Once in place, rent control areas will limit rent increases to a level in line with inflation annually or market rates between tenancies."

What has the Scottish Government said?

 

The Scottish Government said: "Long term rent controls would help keep homes affordable for tenants in future … the Housing (Scotland) Bill sets out how close working with councils will ensure rent controls are tailored to the local needs of tenants and landlords in different parts of the country."

The Scottish Government proposals cover both in-tenancy and between-tenancy cases, unlike the temporary solution which was only in-tenancy.

It would also mean councils would establish rents every five years and recommend local rent controls to Holyrood.

 

What else is suggested from within the industry?

 

More Homes More Quickly proposes different rent controls structure with changes to the Bill to:

Allow annual rent increases linked to inflation "subject to a reasonable cap ... this provides predictability for landlords and tenants, ensuring rents remain affordable without discouraging investment".

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Implement rent controls for a fixed maximum duration, after which a review and reassessment are mandatory. "This prevents long-term market distortions and encourages periodic evaluation of the controls' effectiveness," said MHMQ.

Develop a consistent national framework for rent controls that allows local authorities to adapt policies to local conditions. "This ensures uniformity while addressing specific regional needs."

Establish a mechanism for regular review and adjustment of rent control policies based on market conditions and their impact on supply and demand. "This adaptive approach ensures policies remain relevant and effective."