Disputed Rent Controls will Shift Balance back to ‘Good’ Tenants
Saturday, November 25th, 2017
on behalf of Warners Solicitors and Estate Agents
TWO of Edinburgh’s leading property firms have welcomed the likely introduction of controversial rent controls – citing the power shift towards responsible long-term tenants.
Following surging growth in the rental sector with inflation in private rents in the Lothians at 25% in the past six years, the Scottish Government is due to announce a major change to the way the sector works.
The Short Assured Tenancy, which forms the basis of most tenancies, is to be replaced by the Private Residential Tenancy (PRT). Among the changes is an element of ‘rent controls’, which has resulted in controversy across much of the sector.
Tenants will be largely protected from large increases in rents via Rent Pressure Zones (RPZs) – areas where rents are considered to be rising too quickly, with these RPZs subject to caps on rent increases, limited to once per year.
Neil McInnes of Umega Lettings, one of Edinburgh’s leading letting agents, said: “Average tenancy lengths are increasing and more and more tenants are making their home in the private rented sector.
“The changes being put forwards will provide tenants in popular areas with security via the transparent way rent increases will be calculated.
“This is helpful to both tenants and good landlords over the long-term, rooting out rogue landlords that may be inclined to take advantage of a settled family.”
David Marshall, Operations Director with Warners Solicitors & Estate Agents, added: “Rents tend to rise more quickly when properties come back onto the open market and for that reason the changes are likely to be of limited effect in terms of stemming rental inflation.
“Most landlords know however that there is real value to having a good, reliable tenant who they know will look after the property and pay their rent on time each month. Because of that, in the majority of cases they will be reluctant to increase rents too sharply as they will run the risk of losing a good tenant.
“Nonetheless, the changes should offer greater assurance for tenants who intend to stay in the same place for a prolonged period of time and that will certainly be good news for the city’s renters.”
Under the new PRT scheme, landlords won’t be able to raise rents more than once a year for a sitting tenant. The landlord will also need to give the tenant three months notice of any increase and the tenant will be given an opportunity to negotiate and, if agreement isn’t reached, appeal the increase.
In areas where RPZs are introduced, if a sitting tenant does not agree to a rent increase from their landlord then it could be restricted to a limited increase once a year. The limit is anticipated to be 1% above the consumer prices index.
Neil added: “In my experience with good landlords, it’s unlikely for sitting tenants to experience rent increases above this level on a regular annual basis so a large number of landlords and tenants will be unaffected by RPZs.
“That being said, it is important that we do offer some protection to the small number that would otherwise have been affected by frequent hikes to their rent – which is why we are supportive of the proposals being discussed.”
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Chris Fairbairn is an Account Director with award-winning public relations agency Holyrood PR. He is part of an expert PR team delivering PR services to a wide range of clients from headquarters in Edinburgh, Scotland.View Chris's Profile
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