The prospect of rent pressure zones
If you’re still working on the assumption that you’ll always be able to set the rent for your property, you might want to keep a close eye on the situation in Scotland. The Scottish Parliament has passed legislation which will enable local authorities to establish ‘Rent Pressure Zones’. The effect of these zones would be to limit any rent increases to 1% above the rate of inflation.
In many Scottish cities, rents have been rising very rapidly and affordability is now a serious political issue. The same people who can’t afford to buy, are finding it increasingly difficult to find quality rental properties with manageable rents. Housing activists and the Green Party are calling for the first of these Rent Pressure Zones (RPZs) to be established across the whole of Edinburgh. A report is also being commissioned into the potential use of RPZs in parts of Glasgow.
Like many other regulatory moves, there will be consequences for both landlords and tenants, but the location and details of how these RPZs will work are yet to be seen. The restrictions on rent rises will only apply to existing tenants, but it’s not hard to see that where there is substantial demand for rental properties, landlords could choose simply not to renew with an existing tenant and start over with an unrestricted higher rent. And, where a landlord wants to make substantial improvements to a rental property, he or she will need to apply to a rent officer if they want to increase the rent.
Of course, Scottish law is different, but as we’ve already seen with lettings agency charges, Scottish initiatives can cross the border.
In property, you need to keep your eyes and ears open, but we’ll always do what we can to keep you informed.