It is clear that rent controls as experienced in the UK in the past and currently in other countries can bring with them unintended consequences pushing up prices, reducing quality rather than heralding more affordable tenancies.
In light of this, the responses to the Scottish Government’s consultation, “a new tenancy for the private rented sector (PRS)”, published this week, make for interesting reading.
There was overwhelming support from both the PRS industry and tenant bodies for annual rent reviews, an extended notice period for tenants and redress to an adjudication authority when rent rises were deemed unreasonable (a particular measure that already exists).
However, there was also overwhelming resistance from 70 per cent of respondents – to the introduction of rent controls.
This resistance is perhaps understandable given the latest figures from the Office for National Statistics for July tell us that private rents in Scotland rose by just 2.1 per cent over the year.
It is evident that great progress has been made raising the standards of Scotland’s vital private rented sector in recent years, a sector which is home to 330,000 diverse households from families, to students to professional, mobile career couples, across all income groups.
What drives up rents is lack of supply and I believe that the responses to the latest consultation allow us time to draw breath.
What’s needed now is a period of constructive dialogue to consider how Scotland can use the powers available to it to boost supply, delivering even better choice and quality for those looking to rent and a stable regulatory environment that encourages pension funds and savers to invest.
Let’s deal with housing affordability in a rounded way and not rush into a crude system of rent controls that has so often been shown to make matters worse.
Head of research, Lettingweb for PRS 4 Scotland