Edinburgh set for new US-style rent control powers

RENT rises would be capped under calls for tight controls on landlords in the Capital once new laws come into force.

Wednesday, 5th April 2017, 8:50 am
Updated Saturday, 8th April 2017, 10:12 pm
In the US sitcom Friends, Monica's apartment was subject to rent control. Picture: complimentary

Lothian has the highest inflation in private rents in Scotland, with rents for both one and two-bedroom properties in the region rocketing by more than 25 per cent over the past six years.

Experts are predicting a further increase of 20 per cent over the next five years.

Legislation passed last year by the Scottish Parliament and due to come into effect in December introduces new controls which can be implemented in areas designated as “Rent Pressure Zones” (RPZ) by the Scottish Government.

Sign up to our daily newsletter

The i newsletter cut through the noise

Now Edinburgh’s Greens are calling for the Capital to be first in the queue for RPZ designation to keep rent rises down.

In an RPZ, landlords are still allowed to put up rents, but they are limited to an annual rise of inflation (CPI) plus one per cent. Such controls are common in many US cities.

The Greens say it is a modest measure, but one that would help tenants who are struggling to cope financially.

The legislation allows councils to ask the Scottish Government to designate all or part of their area as an RPZ.

The Greens say the entire city should be covered because Edinburgh is one housing market and the whole Capital is affected by high rents, even if some areas are worse than others.

Edinburgh has the biggest private rented sector in Scotland. The number renting rather than buying has increased as house prices rise and it becomes more difficult to find a deposit for a mortgage.

The fear is that tenants find themselves paying the price for a booming rental sector where demand outstrips supply rather than a rent which reflects the level of accommodation they are getting in return.

Green housing spokesperson Steve Burgess said: “It’s a modest step which will limit rent rises but, coupled with real action on more affordable housing and further powers to introduce rent controls, it will mean tenants getting a better deal than they currently get.”

Last month, the Royal Institute of Chartered Surveyors put the average rent paid in the Capital in January at £726 per month and forecast rents would rocket by a fifth by 2022, pushing the most vulnerable tenants out of the private rental market.

David Alexander, managing director of city property firm DJ Alexander, said it would be difficult to argue the whole city should be included in an RPZ.

“In some places like Trinity and Blackhall it’s actually quite difficult for landlords to rent out property. Obviously there are other areas which are popular, like Morningside, the New Town, Stockbridge and the West End.”

But he suggested the limit on rent increases would not present too much of a problem for landlords.

He said: “If rent rises are capped at CPI plus one per cent I think most landlords could live with that. Most rent increases would be a percentage of the rent and so long as you are able to set the rent at the start of the tenancy, that kind of cap people could accept.”