The next item of business is consideration of Parliamentary Bureau motion S6M-10523, on approval of a Scottish statutory instrument. I ask George Adam, on behalf of the Parliamentary Bureau, to move the motion.
I rise to speak against the approval of the SSI. The decision to implement rent controls was taken by Parliament under emergency Covid-19 legislative measures. Since the policy was implemented, we have seen record-high rents for new tenancies in Scotland; they have increased at the highest rate anywhere in the United Kingdom—there was an average 12.7 per cent increase in the year to July.
Asking rents in Edinburgh and Glasgow have risen at a rate of 15.5 per cent and 13.7 per cent in only one year—the highest rate of increase of any UK city. We have warned Scottish National Party and Green ministers that new renters across Scotland will see rents increase at that alarming rate. The managing director of Citylets, Thomas Ashdown, has said:
“We are living through unique times for the Scottish Private Rented Sector. Never before have we recorded such steep and sustained annual price appreciation across a single region, never mind across the country as a whole.
A vicious circle of low supply leading to higher rents for new tenancies and less movement within the sector seems to have been set in motion as the rent gap between open and closed markets grows.”
He went on to say that
“evidence of landlords leaving and pressures on would-be property buyers” make it
“clear we have a difficult path ahead in achieving balance.”
SNP and Green ministers do not seem to understand how the rent control policy is impacting the housing market in Scotland, especially in our cities. The policy has been deeply damaging for the private rented market, with many buy-to-let developments, for example, now being put on hold or abandoned. In the social rented sector, business plans are being rewritten and the level of social rental completions is at the lowest that it has been for many decades.
The Scottish Government must recognise that the continuation of the policy will lead to counterproductive outcomes for many people and will directly lead to significant future rent increases for everyone in Scotland. We will therefore not support the latest extension at decision time.
I might have misheard Miles Briggs, but I think that he said that the measures were introduced as part of the coronavirus emergency legislation. However, what we are talking about today comes under the auspices of the cost of living emergency legislation. We introduced the Cost of Living (Tenant Protection) (Scotland) Act 2022 to support tenants at a time of unprecedented financial pressure. We acted to stabilise housing costs, to help people to stay in their homes and to reduce the impact of eviction. Since its introduction in October last year, the act has provided important additional protection for tenants.
In June, we published a statement of reasons for the second proposed extension of the emergency act. That statement set out the intention for the measures in the act to be extended for a further, and final, six-month period, which will run to the end of March 2024. Last week, I had the opportunity to provide further information on the matter to the Local Government, Housing and Planning Committee.
Although some economic indicators have changed for the better, the statement of reasons provides updated data and economic analysis that show that the challenging economic position has not yet changed fundamentally and that many households on low and modest incomes continue to feel the strain of cost of living pressures. For that reason, I am seeking to extend part 1 of the emergency act, in its current form, until 31 March 2024 at the latest.
I recognise that some landlords are impacted by rising costs, which is why there continues to be a safeguard in place that allows landlords to apply for approval of an increase of up to 6 per cent in specific circumstances. In response to Mr Briggs, it is worth highlighting that that applies to the private rented sector. A voluntary agreement was reached with the social rented sector that provides an alternative way forward.
I do not know whether the minister is coming on to this point, but the real concern in the sector relates to the significant increases for new entrants. Does he recognise that, in his community in Glasgow, the policy is leading to one of the highest rent increases for new entrants—13.7 per cent? That is a direct result of the policy.
I was about to come on to precisely that point. In proposing the extension, we have, of course, taken into account what is happening in the wider housing market. At present, the number of registered landlords has remained stable. Some data sources show that rents for newly advertised properties in some parts of Scotland are rising significantly. Such rates mirror those in comparable cities in the rest of the UK—not just London, which, of course, has a very overheated property market and where there has been a 13.5 per cent increase, but Southampton, where there has been a 10.7 per cent increase, and Manchester, where there has been a 13 per cent increase.
While tenants in the rest of the UK have faced a double hit of, at times, double-digit rent rises within tenancies as well as between tenancies, tenants in Scotland have faced only the latter. It was not possible to address the intertenancy rent increases using the emergency legislation. However, those increases reinforce the need for an effective national system of long-term rent control in Scotland. A thriving, well-regulated private rented sector is good for tenants as well as landlords, and well-regulated markets can, and do, attract investment to support good-quality affordable homes. We see that in other countries where rent control is part of the operation of the private rented sector.
In seeking to extend part 1 of the act, I will continue to ensure that the provisions do not remain in force for longer than is necessary in connection with the cost crisis, and I will keep under review the on-going necessity and proportionality of the measures.
The Presiding Officer:
The question on the motion will be put at decision time.
That the Parliament agrees to nominate Kate Forbes as a full member of the Committee of the Regions UK Contact Group, and to nominate Keith Brown as a full member and Alexander Stewart as an alternate member of the Congress of Local and Regional Authorities of the Council of Europe.—[
The question on the motion will be put at decision time.