Scottish government to introduce rent controls

It was announced last week that the Scottish government is to implement rent controls in an effort to limit increases in the cost of housing.

A year before the 2016 Scottish Parliament elections, the SNP’s programme for government was set out by First Minister Nicola Sturgeon.

A Private Tenancies Bill was included within the programme. It contains measures to “provide more predictable rents and protection for tenants against excessive rent increases, including the ability to introduce rent controls for rent pressure areas”.

New model tenancies – which will improve security of tenure for tenants and prevent landlords from asking tenants to leave simply because a fixed-term contract has ended – will also come into play. This policy will apply to those areas where rents are growing the fastest.

Rent controls are broadly supported by the public. A poll carried out by Survation in January this year revealed that just 6.8% were 'somewhat' or 'strongly' against the controls. By contrast, 59% stated they 'somewhat' or 'strongly' support the state being able to control how much landlords take from tenants each month.

It was one of Labour’s flagship policies before the last general election, with ex leader Ed Miliband saying that rises should be limited to inflation over a three-year period and that the standard tenancy length should become three years. However, Conservative chair Grant Shapps slammed the proposals at the time as 'Venezuelan-style'.

Some of the Labour candidates aiming to become the next Mayor of London have also proposed rent controls to try and deal with the issue of high rents in the English capital.

Many countries on the Continent – where long-term renting is more commonplace – have some level of regulation to control increases in rents, but this is not currently the case in the UK.

It hasn't always been that way, though. Before the Housing Act was introduced by Margaret Thatcher in 1988, local authority rent officers had the capacity to negotiate substantially lower rents for private tenants.

The Scottish government's intervention comes at a time of rapid rises in rents. According to HomeLet's index for the three months to July 2015, rents throughout the UK have increased by 12% in the past year.