Housing (Scotland) Bill: consultation

Introduction

Housing to 2040^[1] aims to ensure all tenants, whether living in private or social rented homes, have access to secure, stable tenancies with good quality, affordable choices whilst also benefiting from professional levels of service and rights. This would be supported by changes to improve the way the rented sectors operate.

The Scottish Government’s New Deal for Tenants: Draft Rented Sector Strategy, published in December 2021^[2], sought views on a number of proposals for changes to improve the way the rented sectors in Scotland work. This included setting out our proposed vision for future rent controls, whereby tenants pay affordable and reasonable rent for good quality homes. Our proposals for rent control are designed to reduce poverty and improve outcomes for low income tenants and their families. We also want rent controls to be designed in a way that will support and encourage the private rented sector to improve the quality of rented properties. An analysis of the consultation responses was published in August 2022^[3].

This was followed, in September 2023, by a questionnaire asking private and social rented sector landlords and tenants questions on the detail of rental sector reform proposals being progressed. The proposals on which we sought views included rent control, changes affecting joint tenancies, evictions and the right to personalise and keep pets in a rented home. An analysis of this questionnaire’s responses was published in March 2024^[4],[5].

The Housing (Scotland) 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^[6].

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 (CPI) (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.

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.

The questionnaire is open for responses from 23 April 2025 until 18 July 2025. Further details on how to participate in the consultation and the process for submitting a response is provided at Housing (Scotland) Bill - Scottish Government consultations - Citizen Space