Scotland is to introduce rent controls and ban “no fault” evictions in a shake-up of the country’s private rented sector.
First Minister Nicola Sturgeon has released the Scottish National Party’s programme for government for the forthcoming year.
The programme contains a Private Tenancies Bill which includes measures to “provide more predictable rents and protection for tenants against excessive rent increases, including the ability to introduce rent controls for rent pressure areas”.
It will also “remove the 'no-fault' ground for repossession, meaning a landlord can no longer ask a tenant to leave simply because the fixed-term has ended.”
The Scottish Property Federation (SPF) says rent controls could deter investment in Scotland’s private rented sector and curtail much-needed housing supply.
The SPF is concerned that even the possibility of rent controls could sound the death knell for future investment in the build to rent market. It says build to rent has the potential to rapidly boost Scotland’s housing supply, which needs to be increased dramatically across all tenures if the current housing shortage is to be resolved.
David Melhuish, director of the Scottish Property Federation, said: “We will consider the detail of the Bill carefully when it is published but we have been trying to encourage investment into Scotland’s purpose-built rental market for a long time, and it has been great to see momentum build over the past few months with some big deals taking place. A clear message we have had from the industry, however, is that the mere prospect of rent controls, could be enough to spook potential investors bring us back to square one again.
“If the Scottish Government wants to increase housing supply, then the introduction of rent controls is not the way to do it. The purpose-built private rented sector has the potential to deliver a large amount of new homes across Scotland, and we should be doing everything we can to encourage investment in this sector rather than regulate this sector before it has had chance to take root.”