Build-to-let homes to be exempt from rent controls, says Government

Build-to-let and mid-market homes will be exempt from proposed rent controls, Scotland’s Housing Secretary has said.

The Government has proposed allowing councils to create rent-control zones as part of its Housing (Scotland) Bill, which would cap increases by the rate of inflation plus one percentage point.

But in a letter to the Local Government, Housing and Planning Committee, Mairi McAllan said there would need to be exemptions over fears it could affect housebuilding in Scotland.

The Bill was initially proposed while the Greens shared Government with the SNP, but rent controls, one of the party’s major issues while the Bute House Agreement was active, have been watered down under John Swinney’s tenure as First Minster.

“The consultation responses reveal a divergence of opinion, with many expressing opposition to exemptions,” the minister wrote.

“However, the responses also reveal a strong rationale for exempting certain categories of property on the basis that this is essential to increasing housing supply and addressing affordability challenges.

“Amidst this housing emergency, it is vital that we prioritise expanding the housing stock.

“A robust supply of homes is fundamental to improving both availability and affordability across Scotland.

“Therefore, after careful consideration of all of the arguments, it is my intention, in principle, to bring forward regulations exempting mid-market rent and build-to-rent properties, where appropriate, from relevant rent controls under the Housing (Scotland) Bill.”

The minister said she understood there had been “concerns” over the possibility of exemptions from supporters of rent controls, adding: “It is therefore crucial that we carefully define the scope of any exemptions to ensure they serve their intended purpose, stimulating supply, while safeguarding tenant protections.”

But the Scottish Greens said they would be tabling amendments to stop the exemptions, and MSP Maggie Chapman said some build-to-rent developments are “already expensive and are designed to be that way”.

“All renters deserve protection and stability, not only those who live in certain types of homes,” she said.

“There is absolutely no justification for creating a two-tier system like this, which will create confusion for tenants who will not know if they are covered by rent controls or not.

“It’s no wonder the landlord lobby has welcomed the announcement, but their interest has never been about the wellbeing of renters.

“We have the opportunity to start fixing a broken housing market that is punishing people all over Scotland.

“We must not water down or dilute our ambitions by building in loopholes, exemptions and handouts for big developers.”