Why Rent Controls Are Bad For Tenants

A new report from Propertymark highlights a growing concern for Scotland’s private rental sector. The report suggests that the Scottish National Party’s rent controls and eviction ban policies, implemented in alliance with the Scottish Green Party, are causing problems in the sector.

Due to the extended Cost of Living (Tenant Protection) (Scotland) Act, many landlords are unable to evict tenants, which is causing some with naturally ending tenancies to sell their properties. In the latest report, 94% of letting agents reported an increase in investors choosing to get rid of their properties, rather than renting to new tenants.

The report also highlights that landlords who are not selling are raising rents between tenancies to secure their future financial positions. 94% of agents reported that their landlords are more inclined to raise rents as a result of the measures, compared to 91% in December 2022.

The report states that the emergency legislation is discouraging investment in the sector and pushing landlords out, instead of solving supply issues. As a result, rents are rising faster than they might have otherwise. Of all the notices served to tenants, an average of 67% do not meet the exemption criteria and are awaiting processing from October 2023. This is up from 44% in the previous report.

Timothy Douglas, head of policy and campaigns at Propertymark, commented that “the crux of the housing problem is that demand is far outstripping supply, but this legislation is counterproductive for tenants, pushing landlords out of the sector and leaving little choice for those looking for a rented home.”