Housing Bill and Mid-Market Rent: recap

Where are we with MMR rent caps?  

As members will already know, the Housing Bill that is making its way through Scottish Parliament contains proposals for long-term rent controls for the Private Rented Sector (PRS), including Mid-Market Rent (MMR) homes that require Private Residential Tenancies (PRTs). The Bill is currently in Stage One.  

SFHA has been advocating for MMR homes provided by RSLs to be treated with appropriate distinction from PRS rent caps of the past, including rent caps under the previous cost-of-living legislation and ongoing transitional measures that temporarily modify the rent adjudication process.   

Since the Housing Bill was introduced, SFHA, members, and partners have been calling for a clear exemption for MMR homes provided with public subsidy through RSL subsidiaries.  

Our case is built on the existing use of LHA/BRMA limits that effectively act as rent caps, the additional protections provided to tenants of RSLs, and the damaging effects of investor uncertainty in response to the unclear proposals, which is affecting RSL pipelines during a housing emergency and in the context of wider cuts to public housing grant. Most recently, SFHA submitted evidence on the consequences of the proposals to the Local Government, Housing and Planning Committee (lead committee) and the Social Justice and Social Security Committee.  

Scottish Government committed to the introduction of long-term rent controls in the Housing Bill in its recent the Programme for Government (September 2024). The PfG did not include a guarantee the MMR homes would be excluded from the PRS rent cap.   

What is the SFHA’s approach?  

Although the PfG did not guarantee an exemption for MMR, we have received continuous assurances from civil servants that this will be considered as part of the Housing Bill. We are reminded by senior officials that the PfG statement caveats, “We will bring forward amendments to the Bill that 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.” We will work with members to continue to make the case that ‘certainty’ is best provided through an exemption from PRS rent controls.  

From these comments and statements, it looks possible that Scottish Government may bring forward its own amendment. However, this is not certain and we know civil servants are unable to provide detail on the ongoing Parliamentary process. We will continue to welcome members’ views and amendment proposals in preparation for stage 2. We are also continuing to work with key, supportive MSPs on the issue, should an amendment need lodged.  

What’s next in the process? 

In August, members and SFHA met with the Head of the Rented Sector Unit in the Better Homes Division of Scottish Government—who lead this Housing Bill work—to discuss our concerns with the rent control proposals, share evidence on their effects, and discuss the requirements for an exemption to rent controls for RSL subsidiaries through a legislative amendment. Scottish Government is ‘considering the information gathered so far’ and plans to set up a further small-group meeting in November. We will share further information with members of our Mid-Market Rent working group when received.  

Parliament confirmed stage one will conclude by 29 November.  

If you would like to discuss, please contact Annabel apidgeon@sfha.co.uk.