SNP announces loopholes for new rent controls

Yahoo

23-04-2025

Landlords could be allowed to increase their rents by more than the SNP's proposed cap if they make 'significant improvements' to their properties, ministers have announced.
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.'
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