Agents slam politicians for new law allowing rent controls

Propertymark has come out with a strongly-worded statement accusing politicians in the Scottish Parliament of ignoring the industry’s views on rent controls.

Section 1 of the Housing (Scotland) Bill, which has been debated in the Scottish Parliament since late March, includes a commitment to introduce rent controls decided by local authorities. A Propertymark statement says: “As the Bill is proceeding unaltered, the Scottish Government has ignored sector feedback which outlines the new legislation could do more harm than good for prospective tenants struggling to find a place to live.”

Two committees in the Scottish Parliament – the Social Justice and Social Security Committee and the Local Government, Housing and Planning Committee – are currently scrutinising the Bill: Propertymark gave evidence to the latter in June and subsequently met Scottish Government officials to push for amendments to the Bill.

The new SNP Housing Minister, Paul McLennan, will provide evidence to the same committee next month and after further deliberations the measure is likely to be law by summer 2025.

The trade body’s argument is that there are unintended consequences of the legislation, particularly its potential to reduce the availability of privately rented homes and increase expenses for renters due to restrictive regulations. 

Correspondence between the Housing Minister and Propertymark has now ended with the trade body stating on its website: “Unfortunately, the Minister’s letter … misrepresents the evidence organisations listed have provided and, therefore, fails to take our legitimate concerns seriously. As we have consistently said, the Bill does nothing to address the fundamental point of demand, and we are concerned that the proposed rent control regime is the only option to help with affordability for renters.”

Propertymark continues: “The [Scottish] government should not discourage landlords from providing rental housing and should ensure they have the financial means to invest in and improve property standards. Increasing the supply of properties, rather than capping rents, will ensure rents fall and landlords stay in the market. 

“The private rented sector is not just a part of the housing picture, it is a vital component, and our member agents continually deliver safe and secure housing for millions of people … Research conducted in 2023 indicates that right now, the proposal of rent controls is already having a detrimental effect, particularly on tenants in the private rental sector. 

“The average rent for a two-bedroom home in Scotland has surged by over 14% as landlords seek to cover costs and prepare for the new legislation.”

Nearly two thirds of Scottish lettings agents have noticed more landlords quitting, and a survey by the agency Rettie suggests as much as £3 billion of investment in Build To Rent has been deterred by the threat of more rent controls.

A Propertymark spokesperson says: “While we recognise the Scottish Government’s policy is to ensure a fairer private rented sector, it is disappointing and somewhat surprising to see that the sector’s overwhelming criticism of rent controls has been ignored, especially considering the substantial engagement Propertymark and the wider sector has had with MSP and Scottish government officials.

“At a time when the PRS faces considerable pressures, and Scotland faces rising homelessness levels, the Scottish Government must listen to the sector to prevent a further reduction in the availability of private rented homes for tenants.”