Property leaders express relief over rent increases – Daily Business

Property leaders say proposed new rules on rent rises will help provide certainty for investors and tenants, but potentially undermine the student accommodation sector.

Following a vote last night, the Scottish Government plans to introduce rent increases linked to CPI+1%, to a maximum of 6% for properties in rent control areas. 

An attempt by the Scottish Greens to limit increases to no more than the cost-of-living or increases in wages was defeated. SNP members and opposition parties on the the Local Government, Housing and Planning Committee also blocked proposals that would give the Government powers to introduce an emergency national rent cap if required. 

Following the meeting, Scottish Property Federation director David Melhuish said the committee had “recognised the importance of allowing modest, inflation-linked increases in rents for properties included within rent controls areas.”

He added: “If we must have rent controls, then they need to be investable and pragmatic controls. The proposed formula of CPI +1%, to a maximum of 6%, achieves this and brings the necessary clarity and certainty for both investors and tenants alike.

“This is critical at this time if we are to kickstart investment in new supply of build to rent and mid-market rent in Scotland. 

“Without the ability to adjust rents in line with inflation, the viability of maintaining or investing new rental homes becomes significantly challenging.

“This would threaten to reduce the pipeline of quality new rented housing – an outcome which would worsen and not address Scotland’s housing crisis.”

He said that a year on from the national housing emergency declared by the Scottish Government, the need for investment has been never more apparent.  

“Nevertheless, we are still concerned that other key amendments to the Bill will undermine this progress.

“In particular, the recently passed amendment to introduce rent controls on student tenancies raise serious viability questions about future investment in the Scottish PBSA market.

“Of equal concern is the government’s recent commitment to introduce a 28 day notice to quit period for students. Unless clearly specified as for exceptional circumstances, this measure will significantly undermine the basis of investment into the sector” 

“We continue to engage with MSPs, officials and the industry as the Bill progresses.” 

Scottish Green MSP Maggie Chapman intends to continue pushing for stronger rent controls and “better” renters’ rights and will force another vote on lower rents at Stage 3 in June.