Scotland’s first minister, Humza Yousaf, has presented a commitment to introducing long-term rent controls and new tenant rights under the Scottish Housing Bill, set to be enacted in 2024, as rental prices continue to rise north of the border.

Also, under current cost-of-living measures, as set out by Scottish government, emergency rent caps and a moratorium on evictions will remain in place on existing tenancies until 31 March 2024.

Private rental prices have continued to rise in Scotland according to analysis of the latest data by DJ Alexander.

The company said that rental prices increased by 5.7% year-on-year to July 2023. This was the highest monthly figure since the data began to be collected in January 2012 and is up from 3.9% in September 2022 when the Cost of Living (Tenant Protection) Scotland Bill was introduced.

That bill, which capped mid-tenancy rental price increases to 0% (and up to 3% in certain circumstances) until 31 March 2023, and was extended on 1 April 2023 to allow the rental price increase cap to increase to 3% (and up to 6% in certain circumstances).

While rental prices have increased by a lower amount in Scotland than in England and Wales since 2015 the rate of increase has been growing rapidly over the last year. For example, from January 2015 to September 2022 rents in Scotland increased by 8.7%. The accumulated rate to July 2023 is now 14.1% so has risen substantially in the last ten months compared to the previous eight years.

David Alexander, chief executive of DJ Alexander, commented: “We can see that rents in Scotland have continued to rise at a very fast rate since the legislative changes introduced last September. These increases have been as a response to the legislation but also a reaction to unprecedented demand coupled with increasingly limited supply. The result has been rapid rent increases and a lot of tenant frustration at being unable to find accommodation.”

“In July alone we received nearly 40,000 enquiries for viewings for our rental properties with nearly 30,000 of these in Edinburgh alone. This is a clear indication that supply is not remotely approaching demand which results in these rent increases.”

He continued: “It is, therefore, concerning for landlords and tenants that the First Minister announced his intention to extend rent control rules in forthcoming legislation. The concern is that any prolonged extension of this legislation will only exacerbate the current property shortages resulting in many more tenants being unable to find homes.”

“Given that existing evidence of the implementation of rent controls in Germany, Ireland, Sweden, and San Francisco resulted in higher rents in the long term, enormous shortages [there is an 11 year waiting list for the PRS in Stockholm and a major problem with illegal subletting] it seems strange to pursue a policy theoretically aimed at helping tenants but which, when applied in the real world, ends up costing them more and limiting their ability to find a home.”

Alexander added: “I think that everyone involved in the property sector from developers and landlords, investors, tenants, and social housing providers should be consulted widely about what it is that they want and how it can expect to realistically be achieved. The imposition of policy without consultation, without appropriate analysis of prior implementation of similar policies which have already been shown to have failed, will simply lead the sector into a blind alley which it will then have to extricate itself from. All the while it is the tenants who suffer during these periods of experimentation with the housing market.

“What is required is more social housing, more properties in the private rented sector and an approach which welcomes investment, which is open to discussion about how to resolve our housing issues, and which wants to make Scotland an attractive, thriving place for people to live and companies to invest.”