The case for a Rent Pressure Zone in Edinburgh

In response to concern about rising private rents, the Scottish Parliament has passed new legislation which allows councils to designate areas as rent pressure zones (RPZs), the effect of which is to limit rent rises in existing tenancies.  Ben Parker of Edinburgh Greens has analysed the case for using that new power in Edinburgh, as part of a placement with the Green Group of councillors in the city.  His summary findings are as follows:

  • Edinburgh has the largest and most expensive private rented sector in Scotland, so is the obvious place to start in examining the case for an RPZ.
  • Drawing on both rent officer data and Citylets data as a proxy for rents generally, this report seeks to quantify the scale of rent rises and the impact of limits on rents.
  • Between 2010 and 2017, new rents for two bedroom properties in Edinburgh have risen by 39.8% at a time when inflation measured by the consumer price index was 15.6%.
  • The rise in rents at rates well in excess of inflation has happened across all postcodes in the city.
  • The data appear to suggest that rent rises have been accelerating since 2014.
  • Wage income in the bottom 50% of workers has risen by only 8.1% in the period 2010-2016.
  • If rents continued to rise at the same rate then, by 2020, 2 bedroom properties would cost 61% more than in 2010.
  • Looking across the period 2010-2017, if rents had been capped at inflation + 1%, then they would have risen at not much over half the actual rise rate over the period.
  • Looking further ahead, if a cap of inflation + 1% were applied now, tenants could be over £50 a month better off by 2020 than if no cap applied.
  • Edinburgh should proceed with implementing an RPZ and it should apply to the whole city. At the same time, the council should press the Scottish Government to improve the evidence base on existing rents and continue to push for rent controls on new lettings as well as those on existing tenancies.

Read the full report.