New SNP, Green rent controls under fire from homes industry

While many have argued it was a vital intervention to prevent rents outreaching tenants as inflation gripped, its benefits have been contested.

As it is pointed out by one industry insider, the findings of the Scottish Government landlord and tenant questionnaire provided few surprises.

The housing emergency at the City of Edinburgh Council centres on the prospect of 5,000 households now facing homelessness because of a shortage of affordable housing. Glasgow, also on an emergency footing, expects 2,500 batched asylum decisions in the city. Argyll and Bute declared its emergency earlier, citing record homelessness, social rental homes shortages, and rising private rental costs (Image: Getty Images)

Will Scarlett, founder and director of Scarlett Land and Development, told LinkedIn that there has been “incalculable damage to the Scottish economy” and that “the real loser” is the person seeking to rent “a new, fossil-free, low running cost and affordable home”.

He said that with “no new supply, demand [is] off the scale”.

"Nowhere was the fundamental question asked 'do you agree with rent control?'"

Despite this, respondents made their point in the survey.

READ MORE: Did rent cap fail to keep costs under control?

In the Scottish Government’s analysis of email responses, under views on rent control, it is found that: “In terms of a particular policy area, respondents were most likely to comment on rent controls, with around three in five raising the issue. The considerable majority of those (around nine in ten), including most of those who identified themselves as private landlords, noted their opposition to the introduction of rent controls.

“Among the more frequently expressed views were that respondents felt the introduction of rent controls was already leading to landlords exiting the sector, and that this trend will continue.

“Respondents stated that since rent caps have been introduced, private rents in Scotland have risen faster than anywhere else in the UK; it was felt that the decision to pursue a policy of rent control fails to address the shortage of rental housing, and that this shortage is exacerbating rent inflation.”

In response to the concerns raised, Patrick Harvie, Tenants’ Rights Minister, told The Herald he is “grateful to those who took the time to provide a response to the landlord and tenant engagement questionnaire”, adding: “Analysis highlights a variety of views on rental sector reform, and these findings have been carefully considered in our proposals to deliver a New Deal for Tenants.”

While the existing emergency legislation is due to end in April, he said: “We will continue to engage with stakeholders from across the sector on our long-term commitment to develop a workable system of rent controls for Scotland.”

Mr Harvie also said: “Private renting is a very dynamic sector and has always been characterised by some landlords leaving and others entering. Rent control systems are widespread across Europe, including in some countries with larger private rented sectors than in Scotland.”

The Scottish Property Federation’s David Melhuish told this column in January that “there is still some £2.5bn of new investment and a total pipeline of some 17,000 modern rental homes of all types of tenure that could still happen in the next few years if the government provides the right platform for investment”.

However, this came after it was estimated that when caps were introduced in September 2022, £700m worth of build to rent schemes were put on hold “at the onset of the decision”.

Elsewhere, business editor Ian McConnell pointed to some positive news for Scotland in his Called to Account column, writing: “It has been heartening, albeit in the context of the UK’s economic malaise, to observe some positive readings on the Scottish economy recently.”

In the Business Briefing, Kristy Dorsey writes that Alastair Macphie, great nephew of the founder of Scottish food group Macphie, is stepping down as chairman after 17 years in the role and 37 years in total at the company.

Also this week, deputy business editor Scott Wright points to “the major projects offering hope for the future of Glasgow” in his Thursday column.

And finally, the controversial City of Edinburgh coin toss moment has been reversed, and the green light was given to over 250 new homes in the Scottish capital on original terms.