Scottish Labour leader proposes law on rent control

The new Scottish Labour leader unveiled plans this week to introduce new laws to reform the PRS and help solve Scotland's housing crisis with stringent rent restrictions and power limitations for private landlords.

The proposed “Mary Barbour” law aims to reform the private rental sector and help solve Scotland’s “housing crisis”.

In his keynote speech on the 10th March at the Scottish Labour conference, he detailed an economy which needed “less market and more planning” outlining Labour’s plans to introduce a private members bill that utilises a points based system linked to average wages to enforce fairer rents. As a growing proportion of the electorate, private rental sector tenants have become the targets of both parties, with a speech by Theresa May last week stating that tenants “are right to be angry” about rising rents.

Arguing that a fairer distribution of wealth from the existing economic system will be his key aim, Mr Leonard outlined that a home is a “basic fundamental human right”, setting out new plans to introduce a broad set of regulations that would give tenants greater powers in challenging unfair rents as well as introducing stricter energy efficiency and health &safety for the private rental sector.

The topic of rent controls has been a consistent issue raised at the Labour Party conference, with Jeremy Corbyn’s speech last year arguing “Rent controls exist in many cities across the world and I want our cities to have those powers too and tenants to have those protections”. However, many private landlords and organisations such as Shelter have warned that further rent restrictions could exacerbate Britain’s housing crisis by damaging supply to lower earners, alongside the potential for a significant reduction in quality controls.

In a recent interview, Polly Neate, Shelter CEO argued that “old fashioned rent setting… could end up harming the very people on low incomes they’re meant to help if and when landlords sell their properties”. These concerns were echoed by Ben Southwood, head of research at the Adam Smith Institute, outlining that the policy would lead to “smaller properties, shoddier upkeep and longer waiting lists to get a flat.”

While we can all understand the impact that high rents can have, and sympathise with those households struggling to get by, calls for state intervention are rarely the solution. Rent controls of the style of the proposed ‘Mary Barbour Law’ fail to take into account the rising costs of providing and maintaining good quality rental accommodation. Intervening to establish arbitrary caps on the rent which landlords may charge will simply reduce investment and lead to the withdrawal of much needed stock from the market place. Although rents in certain parts of the country are undeniably higher, in recent years they have risen largely in line with inflation. Rather than focusing solely on the cost of accessing private housing, the NLA would recommend a wider debate taking into account the historically low increase in household income relative to other costs.

Chris Norris, Head of Policy at the NLA

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