Rent Controls - Eco-activists jubilant after agents suffer legal setback

The Scottish Greens - who are in effect the architects of rent controls north of the border - have welcomed a court ruling giving the go ahead to rent controls instituted by the Scottish Government.

The Green Party, in a loose alliance with the Scottish National Party in the Scottish Parliament, extracted rent controls in exchange for political support for the SNP. 

Late last week it was revealed that a bid to seek a Judicial Review of the controls had been rejected by the Scottish Court of Sessions. 

The Greens are delighted with a spokesperson saying: “[The] Cost of Living Act has helped households across Scotland since it was introduced, and they will all be breathing a sigh of relief following today’s Court of Session ruling. We warmly welcome this ruling. It clearly endorses the urgent action we took to support families and tenants through the cost-of-living crisis, and will allow the Scottish Government to continue pushing ahead with further work.

“The decision also makes it abundantly clear that the case fell ‘far short’ in its arguments. I hope this clarity encourages those who represent landlord interests to engage constructively as we develop a longer term framework. With winter approaching, energy bills will rise and the cost of living crisis will worsen, making this work ever more important.”

A rent freeze for existing tenancies was implemented in September 2022 – becoming law in October 2022. The original aim behind the Scottish Government’s decision was to stop tenants from being evicted by a landlord needing or wanting to raise rents. 

However, agents say that in reality it has been proven to drive away investment by landlords to providing high quality and safe housing which is desperately needed. 

Propertymark has been a leading advocate seeking legal counsel regarding the legitimacy of this proposed new legislation. The argument was that the new proposed laws would prove disproportionate and unfair between tenant and landlord, with the trade body playing a lead role on petitioning a Judicial Review which was submitted to the Court of Session in Edinburgh in January 2023.  

The petition argued that by discriminating against certain sections of society, the new legislation had the potential to breach the European Convention of Human Rights which, despite Brexit, still has jurisdiction on such subjects currently. 

From April 1 this year the Scottish Government committed a U-turn by implementing a rent cap instead of a rent freeze. This limited rent rises in the private sector to between three and six per cent, and these changes were made as part of the Cost of Living (Tenant Protection) Act 2023.   

There had been calls for England to follow suit, as recent media reports have questioned whether Scotland’s policy of rent controls could become instructive for England. However, Housing Secretary Michael Gove’s latest decision has been to not follow the Scottish model.   

Nathan Emerson, CEO at Propertymark, says: "The private rented sector is a crucial provider of housing and has been incredibly let down by a clear lack of understanding which is now driving good landlords away from the private rented sector. The economics of providing high quality homes is becoming alarmingly unviable.

"Private landlords currently commit to providing homes on a huge scale across Scotland and they must be assured that they can cover all costs. When developing policies that directly affect the private rented sector it’s vital that ministers fully understand the investment economics that sit behind the supply of high-quality homes to rent. Ministers must ensure housing policies include wide ranging impact assessments to ensure the system is fully workable for landlords, tenants, and agents alike.”