Housing (Scotland) Bill

Overview

This consultation seeks views on how powers within the Housing (Scotland) Bill ("the Bill") could be used to exempt certain types of properties from rent control and the circumstances where rents could be increased above the level of any introduced rent cap.

The Bill, as introduced to Parliament on 26 March 2024, creates a power for Scottish Ministers to introduce rent control areas. This would only be done following an assessment of an area’s rents by the local authority and a consultation with the relevant local authority and representatives of affected landlords and tenants. If the Scottish Ministers are satisfied, after reviewing this evidence, that capping rent increases for Private Residential Tenancies (PRTs) in an area is necessary and proportionate, that area may be designated as a rent control area through regulations that must be approved by the Scottish Parliament.

Rent increases for properties let under PRTs in rent control areas (other than exempt properties) would be limited to once per year, regardless of how many tenancies are granted by the landlord in that period – one increase per property per year. This means that the rent cap would apply to rent increases both during and between tenancies, to stabilise the level of rents within the area and avoid the potential for rents to continue to rise more steeply between tenancies.

Further information on rent control provisions in the Bill, as introduced, is available in the Policy Memorandum on the Scottish Parliament’s website.

In October 2024, in response to stakeholder feedback, we confirmed our intention to bring forward an amendment to the Bill which would set out the form which the proposed rent cap would take. Subject to this amendment being approved by Parliament, rent increases would be limited to the lower of (i) the percentage change in the Consumer Price Index (a measure of inflation) plus 1% and (ii) 6%. This fixed rent cap of CPI annual rate of inflation +1%, up to a maximum of 6%, would offer tenants clarity on their costs, should their tenancy be affected by rent controls. 

We also announced our intention to consult on certain types of property which might be appropriate to exempt from rent control and on circumstances where it might be appropriate for landlords to increase rent above the level of the rent cap. This supports consideration of how the powers within the Bill to (i) exempt certain properties from rent control or (ii) allow landlords to increase rent above the level of cap by regulations could be used.

We have been engaging widely and extensively with stakeholders before the introduction of the Bill to Parliament and throughout the parliamentary process. During this engagement, we have heard a wide range of views on the need for certain exemptions from rent controls, as well as certain circumstances where it might be appropriate for rent increases above the rent cap to be allowed.

We have listened to the calls for early clarity from tenants, landlords and investors about the operation of the Bill and have responded to this by bringing forward this consultation in tandem with the Parliamentary process.

As part of this, we are also seeking views on how regulation-making powers in the Bill could be used to clarify how joint tenancies in the private sector are ended. The Bill includes measures that provide a remedy for tenants ‘trapped’ in a private residential tenancy due to a complete relationship breakdown with other joint tenants. The Bill ensures that no joint tenant can be indefinitely held to a rental contract against their wishes, which will be particularly beneficial to joint tenants where domestic abuse is a factor. The new process will give other joint tenants time to consider their options, seek advice and support and where necessary find alternative accommodation.

We recognise that this consultation is launching ahead of Stage 2 of the Bill and that the powers in the Bill may change during the passage through Parliament. We are therefore also asking some questions to inform our considerations about changes that might be made during that passage.

Supporting a well-functioning rented sector is key to the Scottish Government’s aspirations for housing, as of 2022 the sector was home to around 959,000 households, 618,000 of which live in the social rented sector and 341,000 in the private rented sector. These tenures provide vital homes needed in our communities. This consultation is crucial in ensuring that the Bill contains the correct measures that will help to ensure a rented sector that works for tenants, landlords and those who invest in rented homes.

Read the consultation paper. The consultation paper contains full background information for this consultation. You may find it useful to read or refer to while responding.

Why your views matter

The Housing (Scotland) Bill ("the Bill") is currently progressing through the parliamentary process. Parliament has supported the general principles of the legislation at Stage 1 and the Stage 2 consideration is underway and will be complete by 29 May 2025. Subject to the view of Parliament, the Bill will then progress to Stage 3, with the exact timetable being set by Parliament.

Following this final stage of the parliamentary process, and subject to Royal Assent, the measures outlined in this consultation would be set out in regulations, which would also be subject to parliamentary approval.

This consultation has been brought forward during the parliamentary process so that the Scottish Government can give early consideration to the regulations required, with a view to bringing these forward at the earliest possible opportunity, in order to give clarity around the operation of the Bill.

This consultation is crucial in ensuring that the Bill contains the correct measures that will help to ensure a rented sector that works for tenants, landlords and those who invest in rented homes.