ARLA has come out strongly against the introduction of rent controls in Scotland – and accused the Scottish Government of a “fundamental misunderstanding of the lettings industry”.

It has expressed concern that proposals – which include longer tenancy agreements to become the norm – will cost letting agents thousands of pounds.

In its response to the Scottish Government’s second consultation on the private rented sector, ARLA said that changing the tenancy regime will involve changes to systems, and mean staff training.

It estimates that compliance costs will run into tens of thousands of pounds for independent agencies, and into hundreds of thousands for larger firms.

ARLA warns that larger letting agents will be able to absorb the costs better.

It says: “These proposals could see independent agencies either going out of business or choosing to sell to larger firms.

“The result will be diminished competition in the market and reduced choice for consumers.”

The Scottish Government had said that the changes it proposes are “likely to be cost-neutral”.

But ARLA said that such a suggestion “demonstrates a fundamental misunderstanding of the lettings industry by the Scottish Government”.

In its response the organisation also criticises the proposal to impose “rent pressure areas” where rents would be controlled.

ARLA said that imposing rent pressure areas would not only distort the market, but that data shows that in most areas of Scotland, private rents have fallen in real terms, and there is no evidence to support the need for rent controls.

After its first consultation, the Scottish Government made it clear that it is committed to the abolition of the ‘no fault’ ground for repossessing a property.

It means that landlords will not be able to claim their properties back simply because the tenancy has come to an end.

In its second consultation, the Scottish Government did not ask about the ditching of this ground.

However, ARLA makes the case that “it is exceptionally difficult for landlords to demonstrate anti-social behaviour. This is why, in cases of anti-social behaviour today, landlords generally use the no-fault possession ground.”

ARLA also calls for two additional mandatory grounds: the persistent and significant late payment of rent, and allowing landlords to regain possession of their property if it becomes overcrowded.

ARLA said: “Currently, if, during a tenancy, more people move into the property making it overcrowded and the tenant refuses either to leave or reduce the number of people living in the property, landlords can use their no-fault ground to regain possession.

“None of the current proposed grounds will allow landlords to regain possession of the property in the event that a tenant who has overcrowded the property refuses to leave.

“Therefore, the tenant will be in breach of their statutory duties with no legal recourse allowing them to comply.”

ARLA has also objected to the proposal that there should be three months’ worth of arrears before a landlord can take action.

It argues that three months is too long, and says the Scottish Government should follow the existing legal standard of two months’ rent arrears.