Landlord news update - Bill proposing cap on rent rises is abandoned
Fri 26 Jun 2020
Earlier this month, it was announced that a Bill which proposed to cap rent increases in private rental sector (PRS) properties has been abandoned by the Scottish Parliament.
The Fair Rents (Scotland) Bill was introduced in June, but failed to be considered by politicians due to the complications of Covid-19 and the prospect it would not become law by the 2021 elections.
Below, we take a closer look at what the Bill proposed and what the news of its abandonment means for landlords in Scotland.
What did the Fair Rents (Scotland) Bill propose?
The Bill, which was put forward by Scottish Labour MP Pauline McNeill, aimed to provide 'fairer' rents for Scottish tenants, giving them additional powers to challenge the rent charged by their landlord.
It also intended to require landlords to disclose more information about the rents they charge across their portfolio.
Its main proposals are outlined here:
- A cap on rent increases for Private Residential Tenancies at no more than the annual Consumer Prices Index plus 1%.
- Giving private tenants the right to apply for a fair rent to be determined no more than once in any 12-month period.
- Requiring private landlords to disclose the rents they charge for each property when they register or renew their registration on the Scottish Landlord Register.
- Instigating a three-year review to judge how the measure worked.
Why was the Bill scrapped?
With the government still assessing the impact of the coronavirus pandemic, it said it would not be able to give the Bill the time required to scrutinise it properly.
Introducing a cap on rent rises would be a complex and controversial move and so it's understandable that the Bill is not being pursued further. It would require a significant amount of debate and consultation with stakeholders and while the priority remains on kickstarting the economy following the pandemic, this level of work may not have been feasible in the coming months.
There has been plenty of new rental sector regulation in recent years, with many measures taking months if not years to come to fruition. Therefore, on this occasion - with next year's elections in mind - the government has decided to scrap the Bill put forward by the Scottish Labour Party.
What has the reaction been so far?
In a statement, the Scottish Parliament's Local Government and Communities Committee, said: "We recognise the effort from Scottish Labour MSP Pauline McNeill in bringing forward this Bill. However, the committee has finite time available for scrutiny, particularly given our pressing need to investigate the devastating impact of COVID-19 on local government and our wider communities."
"Given the limited time at our disposal, we felt we could not give this Bill the detailed scrutiny it deserved and so as a committee we decided not to proceed on this occasion."
Meanwhile, Daryl McIntosh, Propertymark’s strategic development manager for Scotland, added: “In the last few months, there has been an abundance of new legislation affecting the private rented sector."
"Without knowing what effect the crisis will have, it would not be appropriate introducing legislation that may inadvertently have an adverse effect to the sector."
What does this mean for you?
For now, there will be no cap on rent rises. However, similar proposals could come to the fore again in the future.
It's clear that there is clamour to introduce some form of rent control in Scotland as supporters of The Fair Rents (Scotland) Bill claim rents have persistently risen above incomes.
For example, in 2017 the Government introduced measures for 'Rent Pressure Zones', although none currently exist due to a lack of rental data.
As a landlord, it's important to keep up to date with the latest news to ensure you are compliant with the latest PRS rules. What's more, working with an experienced and competent letting agency like Letting Solutions can help you to stay on top of regulation and get the best out of your property portfolio.
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