Spectre of rent control in private residential sector

Recent Scottish Government consultations on proposals to change the current system of assured tenancies and short assured tenancies have highlighted the prospect of rent control measures. So-called "hot spots" are identified (Edinburgh and Aberdeen in particular) where rents that are higher than elsewhere are giving cause for concern. Although the majority of respondents said no action should be taken to control rents or rent levels and it has been accepted that no general controls on rent will be proposed, the Scottish Government has included provisions to help safeguard tenants against “unjustified and excessive increases” in the Private Housing Tenancies (Scotland) Bill now introduced to the Scottish Parliament.

On rent control generally, one proposal is fairly uncontroversial – that there should be no more than one rent review in every 12 month period and that 12 weeks’ notice of the increase of rent should be given to the tenant.

However, the issue of hot spots is a bit different. The Government proposes to introduce property “hot spots”, where it could decide to limit the rate of rent increase, if a local authority considers that rents are inflated due to location. A local authority will be able to apply to the Scottish ministers for an affected area to be designated a “rent pressure area”, provided it evidences that rents in the area are increasing excessively. If designated a rent pressure area, ministers could decide to limit the rate of rent increase in that area for a limited time period.

While, according to consultation responses, most local authorities (who responded) are not convinced that this is a good idea, there is clearly growing traction for this proposal and, not surprisingly, it is the one that is receiving most publicity.