Scotland passes new rent control law

Scotland’s new housing law means rent controls and strict maintenance deadlines for landlords.

Under the Housing (Scotland) Bill, which passed at the end of September, local authorities will have to report to the central government on local rents, rental increases, and their effects on landlords, tenants and properties.

Ministers will be able to designate all or part of the local authority as rent control areas. In these areas, landlords will only be able to increase rent by up to consumer price inflation (CPI) plus 1%, up to a maximum of 6%.

When will rental increases be capped?

Landlords have a couple of years before the first rent control areas are chosen. Local authorities must submit their first reports by 31 May 2027. After that, ministers will decide where to set up rent control areas. This will also take time: Propertymark expects the first local rent controls to begin in 2028.

After that, fresh reports must be submitted every five years. However, that doesn’t mean that landlords are safe until 2032 if their area isn’t designated as a rent control area in 2027. Local authorities can submit interim reports if they think there has been a significant change in local rents or rental growth, as long as they notify ministers first. Ministers can also direct local authorities to do an interim assessment.

Not all properties are affected

Even within rent control areas, some landlords will be able to set rent increases freely. The cap won’t apply to Mid-Market Rent properties, which are a type of affordable housing offered by housing associations and councils that are already intended to have below-market rents.  

It also won’t apply to build-to-rent homes thanks to an amendment late in the process. The Scottish Property Federation had previously warned that rent caps could deter investment in the sector, pointing to a 15% year-on-year fall in the number of units under construction in Q2.

Propertymark welcomed the exemptions, but said that they must go further to give individual landlords a level playing field with institutional investors. However, tenant union Living Rent said that the exemptions were “a cowardly response to extensive lobbying from landlords”.

Not just rent controls

As well as capping rental increases, the bill also tackles other housing issues.

Awaab’s Law, which requires landlords to address damp, mould and other disrepair within set timelines, will apply to private landlords from March 2026.

Public authorities (including councils, the health service and the police) will also have stricter duties to prevent homelessness. Councils will be required to support households under threat of homelessness six months in advance, instead of the current two-month requirement.

And councils will also be able to increase council tax on second homes and long-term empty homes with no upper limit. Currently they can set a surcharge of up to 100%.