A new bid to introduce meaningful rent controls throughout Scotland is to be launched today by a tenants union.
Living Rent, in conjunction with ‘think and do’ tank Common Weal, is upping the pressure with the launch of The Rent Controls Scotland Needs.
The campaigners argue that new powers enabling local authorities to apply for designated Rent Pressure Zones have yet to be used.
In those zones, rent rises would be limited to once a year and be capped.
The powers came into effect at the end of 2017, but so far, not one Rent Pressure Zone has been created.
Campaigners say there are serious flaws in the system, which they claim does not recognise that rents in Scotland are already too high.
A loophole is that the legislation does not set the date at which the first rent rise could be implemented in a tenancy, which means that landlords and letting agents could bring in dramatic rent rises within a few months of the tenant moving in.
Campaigners are now calling for a rent control system where rises would be pegged to a new Scottish Rental Affordability Index.
The index would keep rents below an affordability level, which Living Rent says is 25% of a tenant’s income.
They are also pushing for a new Scottish Living Rent Commission to be created to monitor and regulate the private rented sector.
Co-author of the report and a member of Living Rent, Gordon Maloney, said: “The Scottish Government urgently needs to take action.
“Tenants can’t wait.
“Rent Pressure Zones are not working, but the current situation is simply not sustainable. If we are serious about ensuring affordable, decent housing for everyone in Scotland, then we need proper rent controls now.”
Robin McAlpine, of Common Weal, said: “We need effective rent controls to tip the balance back in favour of tenants.”
Bearing in mind that what happens in Scotland first tends to happen in England a few years down the line – the fees ban being a case in point – see next story.
https://www.scottishhousingnews.com/uploads/documents/Rent%20Controls%20%282%29.pdf
No idea what loophole this article refers to as the PRT Lease is quite clear that rents may not be increased within the first year, and strict controls on the process. extract from the PRT below:
The rent cannot be increased more than once in any twelve-month period and the Landlord must give the Tenant at least three months’ notice before any increase can take place. In order to increase the rent, the Landlord must give the Tenant a rent-increase notice, the content of which is set out in ‘The Private Residential Tenancies (Prescribed Notices and Forms) (Scotland) Regulations 2017’. The notice will be sent using the communication method agreed in the ‘Communication’ clause above.
Within 21 days of receiving a rent-increase notice, the Tenant can refer the increase to a rent officer for adjudication if he or she considers that the rent increase amount is unreasonable, unless the property is located in a rent pressure zone (RPZ). Before submitting a referral to a rent officer for rent adjudication, the Tenant must complete Part 3 of the rent-increase notice and return it to his or her Landlord to notify the Landlord of his or her intention to make a referral to a rent officer. Failure to return Part 3 to the Landlord will mean that the rent increase will take effect from the date proposed in the notice.
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The idea of capping the rent to 25% of income is ludicrous and a very extreme version of rent controls. This is likely to mean many landlords receiving less in rent than they pay out in costs, so landlords would have to subsidise people to live in their properties in effect. This is obviously unsustainable and many homes would be lost to the rental sector. What will be next for price controls? Petrol? Bread? Rice? Price controls have worked really well in Venezuela. Maybe Living Rent should pop out there for further genius ideas.
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‘Gordon Maloney – Full Of Baloney!’ So, just to be clear – the RPZs that so many anti-PRS types called for ‘isn’t working’. So they were wrong then, yes? And yet here they are calling for ever more onerous restrictions. What happens when they don’t work either? Why have they not been introduced if they are such a good idea? Are they aware that even Shelter says 33% is an acceptable rent level! But whilst we’re on the subject, how exactly does the 25% thing work? A brain surgeon tenant on £150k pays £37,500 in rent but the cleaner next door only has to pay £12.50? How would one assess the self-employed, many of whom earn ‘nothing’?! Would landlords only ever let to high-earners? Or is it based on average wages for the postcode, in which case the poor still can’t afford it and the rich benefit hugely? What size or type of property would the calculations be made on – would I have to rent out my stately home for 25% of local pay rate, or for that matter my cramped studio at the ****-end of town?? The mind boggles.
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Yes many of the same questions you ask going through my mind too. Completely ridiculous idea this 25% thing. Someone somewhere needs sitting down and explaining to them how stupid they are.
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Oh I do so love this approach, tenants trying to screw up the system which provides a roof over their heads. When will they learn?
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You can ONLY control rents when there are Surplus properties –
Anyone know anywhere in the UK where there are more properties than occupiers ? – NO
( just Gordon, is it ? )
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… and the English Housing Survey find that the proportion of Income spent on Rent is – DECREASING !
Helloooo
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