Industry leaders are warning the Scottish Government to tread carefully before imposing new rent controls.

Propertymark says there are dangers that the Housing (Scotland) Bill will lead to less homes to rent north of the border.

How exemptions to a proposed rent cap of Consumer Price Index (CPI) plus 1%, with a maximum limit of 6%, are set out will be crucial, the trade body says.

Request power

Under the Bill, rent increases in designated rent control areas will be capped, and the rent cap will apply to rent increases both during a tenancy and between tenancies.

There has been a temporary rent arbitration scheme in place since last year.

Local councils will be able to request the power from the Scottish Government to impose rent caps in their area.

Final stages

Timothy Douglas, Head of Policy and Campaigns at Propertymark (main picture), says: “As the Housing (Scotland) Bill reaches its final stages in the Scottish Parliament before passing into law, MSPs must ensure the legislation is fair for landlords, tenants, and agents, that it drives up standards, and crucially, that it does not reduce the number of much-needed homes to rent in Scotland.

“Setting rent caps at CPI+1% up to 6% in designated rent control areas will support these aims, and ensuring rent data collection is done in a consistent way and the application of rent control areas is applied fairly will help,” he says.

Challenges and concerns remain about the application of rent controls.”

“However, challenges and concerns remain about the application of rent controls between tenancies, and the impact on landlords who make major improvements to the property or have previously kept rents below market value.”

He says exemptions are “a key part of this”, and the government must set out “a roadmap of measures” to support all landlords.

Mayor renews push for rent control powers in London

More on rent controls