Scotland hits landlords with a 3% rent cap

Emergency measures that saw a rent freeze and an evictions moratorium being introduced in Scotland will now see rent rises capped at 3% in the private sector from April, the Scottish Government has revealed.

The enforcement of evictions will still be prevented ‘in most cases’ but landlords could raise rents by 6% if they apply to do so.

That is only to help cover certain increases in costs in ‘defined and limited circumstances’.

The changes to the Cost of Living (Tenant Protection) Act are still subject to Parliament’s approval.

Evictions are still banned for all tenants

And while evictions are still banned for all tenants – except in specified circumstances – the damages for unlawful evictions are being increased.

Also, the rent cap for student accommodation will be suspended which, the government says, recognises its limited impact on annual rents that are set on the basis of an academic year.

The temporary measures will start on 1 April and be extended to 30 September, with the option to extend for another six-month period if required.

‘Helped protect tenants facing the cost-of-living crisis’

Tenants rights’ minister Patrick Harvie said: “Our emergency legislation has helped protect tenants facing the cost of living crisis.

“With many households still struggling with bills, it is clear that these protections are still needed to give tenants greater confidence about their housing costs and the security of a stable home.”

He added: “While the primary purpose of the legislation is to support tenants, I recognise that costs have been rising for landlords too.

“That’s why we intend to allow those in the private sector to increase rents by up to 3%, with a continued safeguard allowing them to apply for larger increases to cover specified rising costs they might be seeing as landlords.

“By allowing increases in rent – capped well below inflation and limited to once per 12 months – we can continue protecting tenants from the minority of landlords who would impose unaffordable rent hikes.

“We will continue to carefully monitor the impacts of this legislation, working with tenants and landlords to protect them from this costs crisis.”

Allow rents to increase by 3% and by up to 6%

The statement by Mr Harvie that the Scottish Government will allow rents to increase by 3% and by up to 6% in the private rented sector from 1st April is a sign ‘that they have seen sense’.

That’s according to a leading property firm DJ Alexander, which is the largest lettings and estate agency in Scotland.

David Alexander, the firm’s chief executive officer, said: “This shift in policy to allow rent increases in the private rented sector from 1 April onwards is a sensible approach following serious concerns from all parties.

“This will hopefully provide some breathing space for the private rented sector which has seen investment slow or stop, a reduction in the number of homes available, and increased pressure on tenants who have been unable to find appropriate homes.”

‘A rent freeze is a knee-jerk reaction’

Oli Sherlock, the director of insurance at Goodlord, said: “A rent freeze is a knee-jerk reaction which, although it might help some tenants in the short run, is unsustainable and has the long-term impact of pushing more landlords out the market and squeezing the availability of rental homes.

“A price cap is a more sensible step forward than a freeze, but it’s still not addressing the key issues facing the market today.”

He adds: “We have an economic and regulatory environment that is driving landlords away from the sector and not enough homes to go around.

“Unless decision makers explore long-term ways to address the housing shortage and keep landlords from leaving, sticking plaster solutions are only delaying the impact of rent rises on tenants.”

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