Swinney kicks rent control policy down political road

He went on to state that the amendments “will clearly set out how rent increases will be capped in areas where rent controls apply, in a way that provides certainty for tenants while also encouraging investment.”

Yet for everyone involved in the housing sector this must have come as something of a surprise, even a contradiction. For everybody knows that the imposition of rent controls anywhere in the world has always led to lower housing investment, fewer properties on the market and higher rents for tenants. Mr Swinney will know from the recent report by the Institute for Economic Affairs (IEA) into nearly 200 studies of the impact of rent controls around the world that they have never worked and have always harmed the rental sector.

However, if Mr Swinney has the answer to how he can increase investments while limiting financial returns he must share it with the world. The current Housing Scotland Bill proposes 0 per cent rent increases for five years in rent control areas, something no investor would consider a viable proposition.

His amendments must also take into account that Scotland’s councils have already warned that collating the required rent data would cost millions of pounds which they are unable to afford, so presumably he will have to find this money in the forthcoming Scottish Budget.

There is the further issue of how likely the Scotland Housing Bill is to be implemented. Mr Swinney’s government officials have already met with the Scottish Association of Landlords (SAL) and given them an outline of the timescale for the introduction of the Scotland Housing Bill which puts implementation in the 2027-28 governmental year, which is some time beyond the next Scottish election.

In many ways Mr Swinney’s statement seems more like a holding pattern for his supporters rather than a serious statement of intent to address the current housing emergency. He seems to be very much playing to the gallery rather than offering a realistic or coherent way forward.

Until we see some concrete proposals on how Mr Swinney intends to amend the Bill to encourage investors while appeasing the rent control advocates it remains uncertain how this Bill will successfully progress.

With the outline by his advisers of the timescale of implementation I suspect that Mr Swinney’s statement is simply an example of a politician kicking a difficult and unsustainable policy down the road beyond the point where he will have to deliver it.

Any property investor will have advised of the unlikelihood of finding a solution through this route.

Meanwhile, investments are on hold or being cancelled or transferred to England, more people are homeless, demand in the private rented sector is at a record high and rents continue to rise.