Propertymark has voiced its frustration with the Scottish Government for ignoring widespread criticism of proposed rent controls.

The Housing (Scotland) Bill was introduced on 26 March 2024 and Section 1 raises a key contention – a commitment to introduce rent controls decided by local authorities. 

As the bill is proceeding unaltered, the Scottish Government has ignored sector feedback which outlines the new legislation could do more harm than good for prospective tenants struggling to find a place to live, Propertymark said.

Timothy Douglas, head of policy and campaigns at Propertymark, expressed his concern, stating: “While we recognise the Scottish Government’s policy is to ensure a fairer private rented sector, it is disappointing and somewhat surprising to see that the sector’s overwhelming criticism of rent controls has been ignored, especially considering the substantial engagement Propertymark and the wider sector has had with MSPs and Scottish Government officials.”

Propertymark cites research from 2023 indicates that the mere prospect of rent controls is already having a detrimental impact on the market.

Average rents for two-bedroom homes in Scotland have surged by over 14% as landlords seek to cover costs and brace for the new regulations. A Propertymark survey revealed that nearly 60% of agents have observed an increase in landlords selling properties or exiting the market altogether over the past three years. Furthermore, £3bn in build-to-rent investment has stalled, delaying the delivery of over 17,000 new homes.

As the Housing (Scotland) Bill continues its review process in the Scottish Parliament, housing minister Paul McLennan MSP is scheduled to provide evidence to committees in September 2024. With the bill expected to be finalised by summer 2025, Propertymark said it remains committed to lobbying for changes. 

Douglas warned: “At a time when the private rented sector faces considerable pressures, and Scotland faces rising homelessness levels, the Scottish Government must listen to the sector to prevent a further reduction in the availability of private rented homes for tenants.”