Scottish rent control legislation prompts price hikes

by Gary Whittaker

New legislation in Scotland that will make rent controls a possibility have led to a surge in increased rents for tenants, a new survey has indicated. 

The Association of Residential Letting Agents (ARLA) Propertymark members survey, carried out by Opinium Research last month, found that 44 per cent of Scottish tenants found their rent costs rose in January, compared with 19 per cent of tenants across the UK as a whole.

This survey was conducted in the wake of the new Private Rented (Tenancies) (Scotland) Act becoming law on December 1st last year, which means new tenancies will be indefinite in duration and may have their rents controlled. Arla said this shows landlords have sought to put up rents while they still can, even though actual rent controls have not yet been introduced anywhere in Scotland.

Arla propertymark chief executive David Cox said: "Rent controls have a history of dramatically deteriorating property conditions as landlords struggle to meet mortgage payments in addition to maintenance costs. 

"However, it seems the very idea of these controls - and open-ended tenancies - is now affecting rent prices for tenants; in anticipation, landlords are raising rents to make sure they can make ends meet, should they be introduced."

He hoped that the figures were not evidence of a "growing trend", but said as long as rent controls are on the agenda there is a "waiting game" taking place to see how such measures will prompt the market to respond. 

The new legislation was drafted by the Scottish government with the intention of providing more secure tenures for those renting, as they would not be forced to leave a home simply because a time-limited tenancy had expired. At the same time, it would allow local rent caps to be put in place to prevent tenants facing large hikes.

Landlords were also meant to benefit from the new laws, with issues like eviction being addressed with the creation of 18 specific circumstances that would permit this.  

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02-March-18General Lettings News