Landlords and tenants in Scotland have been asked to give their views on rent controls – but they are limited in how they can respond.
The Scottish government has extended rent controls until March 2023, which mean that rents cannot be increased by more than 3% – unless landlords apply to Rent Service Scotland with evidence of costs like mortgage interest rates rapidly rising.
The ‘consultation’ period will last until 29 October 2023 and deals with rent controls, along with pets in rental properties, tenant modifications to a property, eviction protection, and uses for unclaimed deposits.
But it’s not considered a true consultation, given the limited options given to responders.
John Blackwood, chief executive of the Scottish Association of Landlords, said: “The Scottish Government has launched a ‘consultation’ on rented sector reform but fixed the questions to prevent any dissent or variation from pre-determined views. This engagement questionnaire fails to allow landlords to note their objections to the policies proposed’.”
“Landlords have always sought to have a constructive conversation about solving Scotland’s housing crisis, but the SNP and Greens are clearly not interested in listening to the views of landlords and investors. They are fixed on their ideological view and policies that harm tenants and the whole of Scotland’s housing sector.”
He added: “The SNP and Greens clearly see this as a tick box exercise without allowing respondents to, at the very least, say they do not agree with a particular proposal.”
Neil Cobbold, managing director of client accounting and automated rental payment specialists, PayProp UK, agreed.
He said: “This consultation, while addressing some key issues within the Scottish rental sector, is not fit for purpose.
“It imposes choices on respondents, effectively forcing them to adopt one of the prescribed options, even if they have reservations or alternative ideas to propose.
“It’s a very restrictive approach that doesn’t truly reflect the complexity of the issues at hand.”
In the consultation itself, the Scottish government said local authorities could assess whether rent controls are needed, while there would be a mandatory requirement to re-assess rent conditions on a regular basis
The proposal said: “Scottish Ministers would be the final decision maker about whether to impose rent control, taking account of the outcome of the assessment process.
“The introduction of a rent control area will be made through regulations which would be subject to Parliamentary approval. There would be a statutory requirement to consult the local authority and representatives of landlords and tenants before a rent control area can be introduced.”
Cobbold argued that if landlords are restricted in how much they can raise rents outside tenancies, this could encourage them to automatically apply the biggest rent increase they can during tenancies, raising rents for a greater number of tenants annually.
The consultation suggested the Scottish government is considering a rent control exemption for build-to-rent providers, admitting that “some investors may see rent control as a deterrent to investment”.
Cobbold added that this will be perceived as unfair, as it could leave private landlords being restricted in how much they can raise rents whilst large-scale corporate property owners would be allowed to increase rents as they see fit.