Private tenancies Scotland - Rent Pressure Zones
Last updated: 2 Jun 2017
- Consulting body:
- Scottish Government
- Period of consultation:
- Runs from 3 May 2017 to 22 May 2017
- CML action:
- Response submitted
The Private Housing (Tenancies) (Scotland) Act 2016 enables a local authority to apply to Scottish Ministers to designate an area as a Rent Pressure Zone (RPZ) if they can demonstrate that rents in that area are rising too much, causing undue hardship to tenants and having a detrimental effect on the authority’s broader housing services.
If Ministers designate an area as an RPZ, there will be a cap on how much rents within that area can increase each year. Any cap set will be at least CPI + 1% and Ministers will have the power to add an additional percentage to this, if they consider this appropriate. A cap can last for up to five years and will apply to rent increases for existing tenants.
The Rent Pressure Zone Requirements for Local Authorities sets out the requirements which any application asking Scottish Ministers to designate an RPZ must fulfil in order for it to be valid. This outlines how an authority can make an application, the information an application must contain, the types of evidence than can be used to support an application, and provides quality criteria and sampling methodology.
Landlords within an RPZ will be able to apply to Rent Service Scotland for a determination of an additional rent amount to reflect any improvements made to the property. The draft Improvement Cost guidance sets out guideline figures for the additional amount of rent a landlord in an RPZ might be able to charge for improvements they have made to their property.
The government’s implementation group has asked for views by 24 May on:
- The Rent Pressure Zone Requirements for Local Authorities and
- The Landlord’s improvement costs guidance
We flag the following comments in relation to lender requirements on the implementation of the Act generally:
- Changes will be required to mortgage terms and conditions, which currently reference assured and short assured tenancies.
- It is likely that lenders will need to make changes to their IT system and processes, to accommodate the new arrangements under the Act.
- Similarly, lending policies will need to be amended, for example, those dealing with temporary grant of consent to let properties with residential mortgages
- Changes such as these will be resource-intensive for lenders. It is therefore important that these issues are considered and factored-in to the implementation timeline, which is already ambitious in targeting end 2017 for implementation.
Download the full CML response to the consultation below.