Rent controls are set to be introduced in Scotland after the Scottish Government’s housing reform legislation passed at Holyrood.
MSPs approved an amendment by the Scottish Greens allowing council tax on second and empty homes to be raised by unlimited amounts, potentially to the 300 per cent already in place in Wales.
The Housing (Scotland) Bill will allow councils to implement rent control zones in their areas, which would cap cost increases at inflation plus one percentage point, up to a maximum of 6%.
But the legislation will not cover investor funded build-to-let or mid-market-rent homes following an announcement by Housing Secretary Mairi McAllan in recent weeks – a move which has been slammed by campaigners but welcomed by developers.
The Bill would also place a duty on all public workers to report to the relevant authorities if they believe someone is at risk of being homeless – a provision dubbed “ask and act” by ministers.
The legislation also includes extra protections for tenants from damp and mould.
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Over three marathon sessions at Holyrood in the past week, MSPs debated around 400 amendments at the Bill’s final stage, culminating on Tuesday night, when the legislation was voted through by 89 votes to 28.
Speaking during the debate ahead of the Bill’s passage, Ms McAllan said: “We believe that everyone in Scotland should have the opportunity of a warm, safe and affordable place to call home.
“It is ultimately the cornerstone of a life of dignity and a life of opportunity.”
She added that the ask and act provisions would “make ending homelessness everyone’s business”.
The minister continued: “I hope that Parliament will vote for this Bill, offering as it does… the chance to change the course of a life.”
The Scottish Conservatives refused to back the Bill, with housing spokeswoman Meghan Gallacher saying the rent control provisions would stymie housebuilding and ultimately exacerbate Scotland’s housing crisis.
“It is a misguided policy,” she said.
“It’s reckless, it’s ideologically driven and it could worsen the housing crisis.
“It could punish tenants, discourage investment and make Scotland a less attractive place to build the homes we so desperately need.”
She added: “If returns are capped permanently, if revenue streams are constrained, then the very incentive to build disappears.
“It is a simple economic fact – rent controls do not build homes, they prevent them.”
While Scottish Labour backed the Bill, but with little enthusiasm, as the party’s housing spokesman Mark Griffin described it as a “very small step forward”.
“We will support this Bill, because it does contain improvements on the current system, but it is not the transformative legislation that Scotland’s housing crisis demands.
“We want to build houses, we want to end homelessness, we want rent controls that work not just in theory but in practice without harming supply.
“Now, this Bill is a step forward, but it is a very small step forward.
“We wish it was a more radical one that we could vote for.”
And Scottish Green housing spokeswoman Maggie Chapman heralded the legislation as a victory for her party, which had championed the Bill while in Government under the terms of the Bute House Agreement.
“A basic human right to live in a warm, safe home has become a platform for profiteering,” she said.
“This Bill and the rent controls it introduces is the first stage of the new deal for tenants that the Scottish Greens promised.”
The campaigns chair of tenants union Living Rent Ruth Gilbert said the Bill was an “important step forward”.
“This Bill would not exist without the hard work of tenants fighting for it.
“However, over the last few months, the government has capitulated to the demands of landlords and has gutted the housing bill of key progressive mechanisms.”
She urged MSPs to enforce emergency protections until the rent controls are put into action, believed to be in 2027.
And Aoife Deery, the housing spokeswoman at Citizens Advice Scotland said the Bill was a “significant step forward” for affordability in housing, but she stressed that the system which is implemented must be “robust, easy to understand and deliver good outcomes, especially for tenants”.
Robin Blacklock, Interim Director, Scottish Property Federation (SPF), said: “The debate surrounding rent control prompted by this Bill has brought significant uncertainty, and the stalled investment contributing to the downturn of Scotland’s housing market which resulted in the declaration of a Housing Emergency 18 months ago.
"There are clear lessons for the future, especially the need to work closely with industry to avoid the disruption as seen in the early stages of this Bill. However, we welcome the recent shift in approach by the Scottish Government and the recognition of the vital role that the private sector must play in tackling Scotland’s housing emergency.
"The passing of the Bill must be the start of a new approach, and we need to see tangible action.
"Despite the prolonged period of uncertainty, we have found a balance between attracting investment and protecting residents: inflationary linked uplifts in Rent Control Areas protects tenants with the CPI+1% mechanism capped at 6%; while the exemptions from rent controls for the Build to Rent sector and mid-market rent housing recognise the need for large-scale investment into the sector.
"While we are moving towards a position which will see investment returning and new homes being built, we now urge the Scottish Government to finalise the detail of the secondary legislation to create a solid base for this investment.
"We also call on Government to commence the process of collecting and collating robust data on the rental market to avoid failures of the past and to ensure the credibility and efficacy of the now enacted legislation into the future.”
Homebuilders say planning delays, access to land and the decline of small and medium-sized building firms are hampering attempts to kick start the sector.
The latest housing statistics for the year to the end of June, released earlier on Tuesday, showed a 6 per cent decrease in all sector housebuilding completions compared with the same period a year earlier, their lowest level since 2018. Starts were down 3 per cent.
