The Scottish Government’s latest rent control legislation may be an improvement on its predecessor, but Propertymark’s Head of Policy and Campaigns Timothy Douglas (pictured) wants further amendments before it becomes law.

Under the new Housing (Scotland) Bill, rent increases in designated rent control areas will be capped at the Consumer Price Index (CPI) plus 1%, with a maximum limit of 6%.

The legislation, which is heading towards the final stages of its journey through the Scottish Parliament, also mandates local authorities to review rent levels every five years and grants Scottish Ministers powers to impose rent controls.

While the CPI-based increases ensure clarity of pricing, concerns remain about the broader impact on Scotland’s private rental sector and Propertymark is warning that restricting rent increases between tenancies could discourage much-needed investment in rental stock, especially in older properties requiring major refurbishment.

Shrinking availablity

Douglas says. “The period between tenancy agreements is when landlords typically invest in refurbishments and essential upgrades. If rent controls limit their ability to recoup costs, property standards may decline, and rental availability could shrink.”

Douglas also highlighted that Scotland’s private rental sector is already contracting due to taxation policies like the Additional Dwelling Supplement (ADS), which recently increased from 6% to 8%.

And research suggests that 14,000 rental homes remain “stuck” in development due to past interventions, such as the rent freeze during the cost-of-living crisis.

Propertymark is therefore urging the Scottish Government to:

• Remove rent controls between tenancies to maintain investment incentives
• Review tax policies that disproportionately impact private landlords
• Pilot rent controls before national implementation to assess regional affordability differences
• Ensure clear communication so landlords and tenants fully understand the policy

Douglas also points out that there is no statutory timeline for Ministers to report back on periodic rent assessments, leading to further uncertainty for landlords.

The housing emergency will not be solved by damaging rent controls”.

And there are broader concerns that restricting rental price adjustments may make Scotland less attractive to investors compared to other UK and European markets. Additionally, energy efficiency improvements could be hindered if landlords lack financial flexibility over future rents.

According to the Scottish Association of Landlords (SAL), more than half of Scotland’s landlords are already considering removing properties from the market, with 79% citing hostility from government and politicians as the reason. If they react badly to the legislation, it could make the current supply shortages considerably worse.

SAL chief executive, John Blackwood, said: “Sustained political hostility towards landlords in Scotland has created an environment in which many are now considering the size of their portfolios, or even whether to remain in the sector at all.

“The housing emergency will not be solved by damaging rent controls or limiting the ability of landlords to provide high quality, flexible housing in other ways”.