Rent controls in Scotland

The issue has reared its head again recently in UK politics, with the revelation by the Scottish Government that rent controls would be introduced as part of a deal between the Scottish National Party (SNP) and the Scottish Greens to secure a majority in Holyrood.

Despite being comfortably the biggest party in the Scottish Parliament, the SNP fell just short of an overall majority at the Scottish elections in May, with 64 MSPs.

As a result, in August, the SNP struck an arrangement with the Green Party. After recent impressive results, it now has seven MSPs to give itself a majority on significant issues. In Scotland, topics such as housing, health and education are devolved and the responsibility of the Scottish Government.

In a document setting out the pact and the issues both parties support, it was revealed that an objective of the Scottish Government will be to ‘implement an effective national system of rent controls, enhance tenants’ rights, and deliver 110,000 affordable homes by 2032′.

Despite the big headlines generated around the announcement, firm details about the plans remain thin on the ground.

However, in its manifesto for the May elections this year, the Scottish Green Party promised to ‘introduce a cross-cutting goal of ensuring that housing costs represent no more than 25% of a household’s income, including a points-based system of rent controls’.

The new SNP/Green majority government has also appointed a Minister for Tenants – Patrick Harvie, co-leader of the Scottish Greens and one of the first Green politicians in the UK to serve as a government minister – known to be a key advocate of rent controls.

It is likely to be a condition of the Green Party’s ongoing support to the SNP that the idea of rent controls is considered, although whether they have enough political power to force the SNP’s hand is yet to be seen.

The SNP have already attempted to introduce rent controls of sorts, but the success of its Rent Pressure Zone (RPZ) policy has been limited. Under the SNP’s Private Housing (Tenancies) (Scotland) 2016 Act, Scottish councils have had the power to ask Scottish Ministers to designate an RPZ. 

An RPZ is an area within which private tenants must not have their rent increased by more than the level of the Consumer Price Index plus 1% each year for a total of five years. However, few councils have expressed an interest in this initiative, and the Greens are likely to demand something more substantial due to their stronger voice resulting from the pact.

Propertymark has warned against the prospect of rent controls in Scotland, saying the plans are ill-thought-out and voicing its concerns about any sudden changes.

Since the announcement of a power-sharing agreement between the SNP and Greens late last month, little has been heard about the proposals for rent controls, but pressure might grow from the Greens if they feel the SNP aren’t going far enough.

The question of rent controls is raised every so often in England, but Conservative governments are typically very reluctant to even go near the word. This current Government is no different, making its opposition to rent controls clear on several occasions.

Jeremy Corbyn’s Labour put the concept of rent controls back on the table. However, following the election defeat in December 2019, he was replaced as Labour leader by Sir Kier Starmer, who has been much coyer about the prospect of rent controls.

One high-profile Labour figure remains committed to the idea of rent controls, though. Sadiq Khan, the Labour London mayor who won a second term in office at the delayed mayoral elections in May this year, has been a long-term advocate of some form of rent caps in the capital.

He regularly champions the cause, most recently in July 2021 when he called for new powers to cap private rents in London. Khan claimed that rents in the capital could increase by almost 20% over the next five years unless he is given powers to control the market.

Despite his frequent calls for more powers to control rents, the central UK government have shown no signs of listening, making the prospect of rent caps in London anytime soon unlikely.

The mayor has a lot of soft influence and prestige but limited powers on critical issues like housing. Therefore despite his rhetoric, he is probably aware there is little chance of implementing rent controls in the capital while the Tories remain in charge of Westminster.

There have also been moves in other parts of the country, typically with Labour-controlled councils or city mayors, for rent caps of some description. Still, again the powers at their disposal tend to be limited when introducing something as significant as rent controls.

For now, it seems that there is no imminent prospect of England following Scotland – and even in Scotland, the idea of rent controls remains just an idea for now – but it is unlikely the debate will go away. It will no doubt rear its head again before too long.