SNP announces loopholes for new rent controls
The Scottish Government has tabled plans at Holyrood that would see rent increases in 'control areas' capped at 1 per cent above the consumer prices index measure of inflation, up to a maximum of 6 per cent.
Shirley-Anne Somerville, the Social Justice Secretary, unveiled plans for exemptions to the cap, allowing landlords to increase rents by more in limited circumstances.
These included where a property has undergone major improvements and if it is being rented out at 'significantly below-market rates'.
Among the potential upgrades that could give the green light for higher increases are a new heating system, improved windows or fitting a new kitchen or bathroom.
Exemptions to the cap could also be applied to homes that are specifically built to rent and 'mid-market' homes, which are aimed at assisting people on low to moderate incomes.
The plans were published as industry data showed a 26 per cent drop in the number of build-to-rent homes under construction in Scotland in the first quarter of this year, compared to the same period in 2024.
Scotland has recorded zero growth in the number of new build-to-rent schemes being submitted for planning compared with a 6 per cent rise in England.
The Scottish Property Federation (SPF), which represents the country's property industry, said the figures were a 'natural consequence' of investor confidence being damaged thanks to rent controls.
The Tories said the 'collapse' in construction was a 'direct' result of the SNP's refusal to listen to warnings that the controls would exacerbate Scotland's housing emergency.
Nicola Sturgeon 's government introduced an emergency rent cap in October 2022. The policy was supposed to be a short-term measure to support tenants through the cost of living crisis.
However, the cap was extended and, while it ended last year, a temporary framework of rent controls is still in place while the SNP finalises the Bill, which aims to make them permanent.
Under the plans, added to the Housing (Scotland) Bill, the cap would apply both to rent increases during the term of a tenancy and in between tenancies.
Ministers would be tasked with determining which areas in Scotland should fall under control areas, with 12 of Scotland's authorities having declared a housing emergency.
But industry figures have disclosed that the previous controls backfired by hiking average rent rises in Scotland, above the increases seen in England, after landlords withdrew their properties from the market.
It emerged last month that building work started last year on the lowest number of private houses since 2013, apart from during the pandemic.
Unveiling a consultation on the possible exemptions to the cap, Ms Somerville said: 'Our rent control proposals will help provide certainty for tenants by keeping them in their homes and ensure rents remain affordable during a cost of living crisis.'
She added: 'The responses will help us strike the right balance between supporting tenants, whilst ensuring the rights of landlords are protected and we continue to support investment in the rented homes we need.'
But David Melhuish, the SPF's director, said: 'While construction activity has slowed across the whole of the UK, Scotland has seen the most significant fall.
'Unless the Scottish Government moves to restore investor confidence through supporting new builds and amending some of its more controversial policies such as between tenancy rent controls, then we will soon exhaust the new supply pipeline of build-to-rent homes as no new planning applications are coming forward and those with approval are simply not being progressed.'
Meghan Gallacher, the Scottish shadow housing secretary, said: 'During a housing emergency, the last thing would-be renters need is fewer properties on the market – but that is what the SNP, by following extremist Greens policies, have ensured.
'Their hostility toward private investment has sabotaged Scotland's rental market, and tenants will be the ones to suffer.'
A Scottish Government spokesman said: 'We recognise that Scotland needs a thriving private rented sector offering good quality, affordable housing options while valuing the benefit that investment in rented property delivers.
'Throughout the development of the measures in the Housing (Scotland) Bill, we have been working with tenants, landlords, investors and developers to make sure we strike that appropriate balance.
' A consultation announced today, will seek views on how the powers within the Bill could be used to exempt certain types of properties from rent control and the circumstances where rents could be increased above the level of any introduced rent cap.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Wales Online
12 minutes ago
- Wales Online
UK Government rules out giving something people in Wales want
UK Government rules out giving something people in Wales want The Welsh Government and all 22 councils want the Crown Estate to be devolved to Wales but the UK Government has said no The Crown Estate, the collection of marine and land assets and holdings that belong to the monarch, is a hot political topic The UK Government has said that the Crown Estate will not be devolved to Wales because it "would risk market fragmentation, complicate existing processes, and delay further development offshore". The Crown Estate is a collection of marine and land assets and holdings that belong to the monarch. It includes the seabed out to 12 nautical miles, which is around 65% of the Welsh foreshore and riverbed, and a number of ports and marinas. On land the Crown Estates owns 50,000 acres of common land in Wales. The value of the estate in Wales is more than £603m of land. It is a hot political topic, because since 2019 responsibility for management of the Crown Estate's assets in Scotland has been devolved but that is not the case in Wales. In 2024, the Independent Commission on the Constitutional Future of Wales – which you can read here – said that options for devolving the Crown Estate to Wales should be looked at. The Welsh Government want it too, with the First Minister making it clear Welsh Labour believe "the Crown Estate should be devolved". Plaid Cymru, which is doing better than Labour in polls ahead of a Senedd election in May 2026, is making it a central pledge of their election campaign. For our free daily briefing on the biggest issues facing the nation, sign up to the Wales Matters newsletter here On top of that, all 22 councils in Wales have now backed a transfer of the Crown Estate from the UK to Welsh Government However, the UK Government has ruled it out. In response to a letter sent by campaigners Yes Cymru to Prime Minister Keir Starmer, Welsh secretary Jo Stevens has said that is not the position of her party colleagues in London. In it, she writes: "It is this government's view that devolving the Crown Estate and introducing a new entity would risk market fragmentation, complicate existing processes, and delay further development offshore. "Furthermore, devolution would mean Wales losing access to Crown Estate investment that comes from its revenues in England. It would also risk undermining investment in floating offshore wind, which is needed to provide lower bills, cleaner energy, and better jobs. This government is focussed on delivering these objectives and so does not support the devolution of the Crown Estate in Wales," the Cardiff East MP says. "Even if devolution could be done without risking the revenues the Crown Estate generates, this would not automatically lead to an increase in the funding available to the Welsh Government. This is because any revenues retained by the Welsh Government in a devolved system would likely be offset through reductions to their block grant as is currently the case in Scotland. "Creating an artificial border through the Celtic Sea would also complicate crucially important work to develop the floating offshore wind industry, particularly as floating offshore wind lease areas straddle the Wales/England border." YesCymru has pledged to intensify the campaign in response to Westminster's refusal, which started with a protest at the Eisteddfod. Chair Phyl Griffiths said: "The Crown Estate proves that the practice of extraction is still alive in 21st century Wales and has resulted in all 22 authorities speaking with one voice, underlining the fact we're a nation. "The London government's response to our call to transfer control of the Crown Estate to Wales, however, only proves that they see us as nothing more than a region of the UK." Article continues below
BBC News
13 minutes ago
- BBC News
NatWest bank chief predicts upturn for Scottish business
There are signs of growing optimism in Scotland's mid-market firms, according to the boss of the company that handles much of their Bank of Scotland, part of NatWest Group, says travel and tourism are showing notable signs of improvement in their outlook, despite the increased cost of payroll tax and the minimum shaft of brighter sunlight comes from technology and telecoms - but for manufacturing, June brought another month of negative Thwaite, chief executive of the NatWest Group, is referring to the firm's monthly business monitor, which draws on data from its customer base. That includes more than 100,000 Scottish business chief executive is in Scotland for two weeks to hear from those customers and from some of his 11,500 staff north of the border, covering bigger cities and a visit to Orkney. On Friday, he visited the windfarm near Eaglesham built by one of the bank's bigger clients, Scottish Power. At an accelerator unit for business start-ups, overlooking Glasgow's iconic statue of Wellington with traffic cone, he heard from the companies using NatWest facilities and offered advice to take their ideas to the next stage and one such group, all of them agree that they have to go to London for Mahapatra, 21, is fresh out of St Andrews University with an economics degree. For four years, he's been running his company, Augmentum, that links health and wellness firms with influencers. Almost all of his staff have to be in a charge also levelled at NatWest. With its name change from Royal Bank of Scotland, only retaining that brand for Scottish customers, this felt like confirmation that executive power resided in London. Thwaite, 53, is from Liverpool and a graduate of Manchester is married to a Fifer and worked in Edinburgh during his 30s. So he's alert to the risks of seeming too London-centric, reeling off the stats that suggest otherwise."Two million retail customers or households, one in three businesses, almost a third of all of our UK staff," he says. "That gives you a sense of the importance of Scotland to the NatWest Group. We are very committed."That may become more apparent in 2027, when Royal Bank of Scotland marks its 300th anniversary. There's thought already going into telling that story of heritage, while trying to look to the marks two years since he was phoned in the middle of the night with the chairman's invitation to take on the top job. Dame Alison Rose, had been forced to quit, after discussing the personal account of Nigel Farage with the BBC's business unhappy incident is not, says her successor, the reason why he's kept a low public profile, saying little to the media beyond discussion of NatWest's financial reports. His people tell me this is his first broadcast interview other than those quarterly results days. It's for radio and online but he's not for talking on most recent such results day, covering the first half of this year, had a strong set of figures. Pre-tax operating profit was up 18% on last year, to £3.6bn. The bank's share price is looking a lot been paid nearly £5m last year, it could see the chief executive get closer to his bonus-laden potential of £7.8m this guidance to markets that the next set of figures will be better than expected, Thwaite argues that his strategy - disciplined growth, simplification and a focus on risk management - is proving right and paying while he would prefer to talk about the future, the memory of another of his predecessors, Fred Goodwin, is stalking the Edinburgh International Festival as a morality tale and tragedy, borrowing from ancient Greece, of greed, power, pride and nemesis. With screen star Brian Cox in a leading role on stage and in Festival publicity, it's hard to avoid the reminders of the Fred Goodwin story, nearly 17 years on."It was relatively early in my career," Thwaite recalls. He was working in Edinburgh, with UK business customers. "I didn't know Fred personally. The bank had expanded significantly during that time. And the UK bank was actually not dissimilar to what it is now - a very strong retail bank, a very strong business bank."And a very bloated and vulnerable international and investment bank."I was shocked and surprised," he said."What it taught me was how important a role banks play in the economy and for customers, and when things go wrong how impactful that can be on communities, on society and on countries."Those who were young and in financial services at that time, and I include myself, have been shaped by the financial crisis. "The way we think about banking now, how the regulators and government think about banking is very different."Thwaite added: "I feel a great sense of responsibility to ensure that the bank is run in a thoughtful, safe, informed way... to learn the lessons from the past and run the bank really well for our customers and also for our colleagues, because they have been incredibly loyal over the last 16 or 17 years, for which I'm very grateful." Just over a fifth of staff have remained with RBS/NatWest since the crisis. For them, he says, the sale in May of the final tranche of UK government shares, having once held 82% of them, was an important symbolic doesn't change the strategy, but it does give the bank more vulnerability to takeover bids and more freedom to take over others. Recent acquisitions have included parts of Sainsbury's Bank and Metro further mergers and acquisitions 'probable', Thwaite says NatWest's market valuation is a deterrent against opportunities to acquire would be approached carefully and in a disciplined way, and would have to beat the return on internal opportunities to invest, in technology for instance. Branch closures Artificial intelligence carries a threat to finance sector jobs, but the bank boss says it's being used to do routine tasks that free up staff time for talking with customers, while helping to root out fraud and financial crime."For AI, it's still relatively early days," he says. "I see it as complementing our brilliant colleagues, but I think we'll know more over the next five or six years."There's a block on further branch closures, but only until next year. Now down to 68 Scottish branches plus bank vans, Thwaite sounds keen to retain that visibility."The successful banks of the future will combine very strong physical presence and service from bank colleagues at real moments of truth - whether that's buying a home, buying a business, buying new premises, but combined with brilliant digital experience, because our customers want and expect that."I think it's important we play a very active role in communities and I want our people to be visible and effective in them."With that, he's off to Aberdeen and Orkney, to see the islands' flying branch and to listen to the oil and gas tax weighs heavily on his customers, he says, as does the threat of further increases at the next Westminster budget."That's definitely in business owners' minds and at board tables," he says, with a message for Chancellor Rachel Reeves. "The role of business, the role of financial services needs to be at the heart of that growth agenda. "Our role is to ensure that we're supporting businesses who have growth aspirations, and I think it's very important that the policy agenda is supportive of that."
Telegraph
13 minutes ago
- Telegraph
Thames Water crisis threatens London super-sewer
Thames Water's debt crisis threatens to trigger millions of pounds in losses for London's £4.5bn super-sewer. Tideway Tunnel, which owns the project, has sounded the alarm ahead of a looming handover later this year – with bosses fearing Thames could withhold cash in its scramble to avoid nationalisation. The sewer owner said it is closely monitoring Thames's plight and has sought assurances from the Government to ensure the project will not be threatened if the company collapses into special administration. In its latest annual report, Tideway said: 'We continue to note Thames Water's evolving financial position and this has led to concern that their situation might change. 'There is a possible risk that Thames Water, given its current financial position, or a special administrator may choose not to pay an element of Tideway's revenue. 'This would not be consistent with Thames Water's licence and would be expected to lead to a breach and enforcement action.' As part of its contingency plans, Tideway also considered the possibility of Thames failing to support the sewer's operations, warning that this 'could affect our ability to deliver our investment programme on time and on budget. 'If Thames Water does not comply with the revenue agreement, it could have a financial impact,' the company added. Concerns over Thames Water's future come as the company struggles under the weight of a £17bn debt pile. The company admitted last month that it could enter a taxpayer-backed special administration regime if a rescue deal led by more than 100 creditors fails to succeed. Thames's financial crisis is in stark contrast to the completion of Tideway, which has been hailed as a rare infrastructure success story. The 25km tunnel under the River Thames, which became fully operational earlier this year, represents the biggest improvement to London's sewage network in 150 years. Buried 67m deep, the concrete pipe is designed to ease pollution pressures by redirecting sewage away from the river and into a treatment works in east London. While Thames will not own Tideway, it is expected to be charged an annual fee for its use of the sewer. This will be paid to Bazalgette, a company bankrolled by a group of banks and pension funds. A Tideway spokesman said: 'Tideway is a completely separate, independent company set up to deliver the Thames Tideway Tunnel project. 'This vital new infrastructure is now operational, and has already diverted away nearly eight million tonnes of sewage that would have historically spilled into the Thames. 'We remain confident that Tideway's revenues are well protected given water industry legislation and the licence obligations that apply to both Thames Water and Tideway. We continue to work effectively with Thames Water to deliver the benefits of the project.'
