More clarity required into introduction of rent pressure zones

The City of Edinburgh Council is to request that the Scottish Government conducts a review into the effectiveness of a rent pressure zone (RPZ) after a report found that the policy is not fit for purpose.

Designed to cap any future increase in rent in a local authority area, RPZs became available as part of the new Private Housing (Tenancies) (Scotland) Act come into force at the end of last year.

In order for councils to introduce a RPZ, they must provide evidence that rents are rising too much, are causing problems for tenants and that the authority is coming under pressure to provide housing. However, eleven months on RPZs have not been introduced anywhere in Scotland.

Now a report by the City of Edinburgh Council, conducted by estate agent Rettie & Co, has called for the process to be sped up after officers revealed that gathering enough evidence to justify a RPZ being introduced could take between three and five years.

In the report, council officers highlighted that “city centre rent prices are now starting to level off having hit an ‘affordability ceiling’ with demand now spreading to neighbouring areas”.

Rettie & Co’s report also found that even once the data was collected the rapid turnover of tenants in the private rented sector in Edinburgh would limit the impact of the policy in practise.

“The time spent in an Edinburgh PRS home is nearly half the national figure, at just 1.5 years in the city compared with nearly three years in the country as a whole. A RPZ can cap rents for up to five years but not initial setting of rents. On this basis it is unlikely that an RPZ would benefit many current private sector renters who are likely to move into another home before seeing any benefit from an RPZ cap on rents,” the report found.

The Scottish Government’s unwillingness to collect rent data centrally “poses a significant challenge to local authorities” because much of the data currently does not exist, the report added.

“Notwithstanding the limited resources within and between councils to undertake work of this complexity and scale, this approach, whereby different authorities bring in different methodologies, significantly increases the risk of undermining the credibility of the process and providing grounds for judicial review,” it stated.

Responding to the report, Scottish Greens Cllr Melanie Main said: “We are looking at challenges with housing in Edinburgh now. Is there a willingness to address the problems that the city is facing now?

“Edinburgh has some of the highest private rents in Scotland. If we don’t take the lead with tackling these problems, we are excluding people on low incomes. It makes it very hard for those on low incomes to be able to live in the city.”

Conservative Cllr Jim Campbell said there was a lack of evidence showing PRZs are effective.

He added: “We have had some concerns about the consequences of RPZs.

“I do think there’s a broad agreement that we need to build more houses. The most important tool is to build more affordable houses.”

But Cllr Main said building more homes would not tackle all the problems the Capital faces with its housing market.

She added: “Building 20,000 homes across ten years is not going to solve the problem – it’s not enough.

“We do need to take action as much as we can on all fronts and high rents are a problem. We need to make the best use of what we have.

“Three to five years is really too long for our tenants who are in crisis and experiencing high rental costs. Edinburgh should be and can take the lead with this.”