New rent control proposals for Scotland are unnecessary and too costly, according to property firm DJ Alexander.

It labelled the transition plan for the ending of the Cost of Living (Tenant protection) (Scotland) Act 2022 as too complex, unwieldy, and costly to implement, and said it would not be beneficial to tenants or landlords.

The proposal – which has a deadline of 15 January 2024 – seeks to introduce controls on the level of rent increases that can be levied when the terms of the Cost of Living Act terminate at the end of March this year. 

It proposes that rents be set by the lowest of three comparators: open market rent; a landlords proposed new rent; and a ‘reasonable’ increase devised from a new taper system using comparison with a percentage of market rent.

The tapering would mean that if the difference between the tenant’s current rent and the market rent was less than 6% then the proposed increase would be allowed as long as this was not higher than the market rent.

Where the market rent is 20% above the proposed rent then an increase of 10% would be agreed and where it is 30% above then the increase would be fixed at a maximum of 15%.

David Alexander, the chief executive officer of DJ Alexander Scotland, commented: “I appreciate that the current consultation is aimed at avoiding a cliff-edge situation when the current legislation ends at the end of March. The problem is that intervening in the market over the last 18 months has not produced any benefits for tenants but has actually been detrimental to their interests.

“By intervening in the market tenants have paid more in rents than they would have had no such intervention taken place. The current proposal of giving a 6% increase is more than the historic annual increases have been and this idea would be extremely difficult to monitor and implement.”

Alexander added: “Unfortunately, this consultation paper seems like a further attempt to impose controls on the market which are unnecessary. This policy would be costly to implement, unwieldy to manage, and not beneficial to either landlords or tenants. 

“A far simpler solution would be to let the market return to normal, not impose external controls on rent levels, and the result will be lower rent increases than we have seen in the last 18 months when rents rose at a much higher annual level than in the previous 13 years.”