Does Scotland have rent controls?

According to Sadiq Khan, Mayor of London, "The arguments for rent control are overwhelming, and Londoners overwhelmingly want it to happen." The call for rent controls is not restricted to London. Pauline McNeill of the Scottish Labour Party has recently proposed a Member's Bill, the Proposed Fair Rents (Scotland) Bill (also known as the Mary Barbour Bill) including proposals to cap rent increases in the private rented sector in Scotland.

But....doesn't Scotland already have rent controls?

In 2017, the Scottish Government introduced the potential for rent controls by allowing local authorities to apply for areas to be designated as Rent Pressure Zones (RPZ). Within an RPZ, the minimum cap on rents will be CPI + 1%, with the Scottish Ministers having the power to increase that cap. The cap will apply to existing rents under private residential tenancies, being the new residential tenancies introduced in Scotland in December 2017. However, notwithstanding the existence of an RPZ, landlords are free to set market rents under any new leases created and moreover, any pre-Dec 2017 leases which continue to run won't be subject to rental caps.

When making their case for an RPZ, local authorities must present a rental profile analysis of the relevant area and the Scottish Government requires that analysis to be specific e.g. by street or postcode. The authorities must also, as a minimum, provide evidence of rent rises greater than CPI+1% for existing tenants within the proposed RPZ and demonstrate that the rises are causing undue hardship to tenants and resulting in the local authority being pushed to subsidise or provide more housing.

At the date of writing, no RPZs exist in Scotland. Why?

One of the main reasons is a lack of suitable rental data. Much of the data which is a prerequisite for an RPZ application simply does not exist; there is no central source for rental data collected from existing tenants. Research commissioned by local authorities including the City of Edinburgh Council on how to implement an RPZ has revealed that it could take anything up to 5 years to collect and analyse the necessary rental data.

This predicted delay in implementing rent controls in Scotland has prompted Pauline McNeill to propose the Proposed Fair Rents (Scotland) Bill in an attempt to speed up the introduction of rent controls. If enough support is gathered for a Bill, it would propose that rents across Scotland be capped at CPI + 1% for new and existing private residential tenants and for rental data to be collected through the landlord registration system. The consultation on the draft proposal for a Bill closes on Tuesday 6 August 2019 and is available to read here.

It remains to be seen whether the proposed Bill will materialise and garner enough support to make its way through to implementation. But, for now, it looks like it might be some time before Scotland will have rent controls.