Scotland’s rent cap backfires with big rent rises for tenants

Tenants in Scotland are seeing big rent rises and the rent cap brought in by the SNP is being blamed – as rent rises elsewhere in the UK begin to fall.

According to the Daily Telegraph which used Zoopla data, the rent cap and eviction ban implemented by Nicola Sturgeon is behind the rent increases.

It says that Scottish renters are facing the steepest annual rent growth across the UK, with an increase of 11.6%.

This growth is particularly pronounced in Edinburgh and Glasgow, where rental costs are rising faster than in London.

The Office for National Statistics (ONS) also reports this week that Scotland has seen the largest rent increase in the UK at 10.9% and an average rent of £944.

Landlords nationwide are offering tenants smaller rent increases

Meanwhile, Zoopla reveals that landlords nationwide are offering tenants smaller rent increases, which have reached a two-year low of 7.8% – down from 11% last year.

In response to the cost-of-living crisis, which Sturgeon referred to as a ‘humanitarian emergency’, Holyrood decided in September 2022 to freeze rents for tenants and ban most evictions.

However, this decision has had unintended consequences and Zoopla says that rents grew by 12.7% in the nine months to September last year. Nationally, the average increase was 10.5%.

Richard Donnell, Zoopla’s executive director, said the rent cap and evictions ban had incentivised landlords and agents in Scotland to ‘push rents up as much as they can’.

He told the Telegraph: “Landlords operating in Scotland have got this challenge that when a property becomes vacant the landlord thinks, ‘Obviously, I must get as much rent as I can because the amount I can increase is limited during the tenancy’.”

Despite these efforts, he added: “Rents in Scotland are more affordable than many parts of the UK so there’s headroom for rents to rise before you use up the buying power of renters.

“Rents can only really rise if renters are able to pay the higher rents.”

Froze rents and later capped increases at 3%

The regulations, introduced by Ms Sturgeon during her tenure as First Minister, initially froze rents and later capped increases at 3% in January last year.

Landlords are prohibited from increasing rent during a tenancy and can only do so when a new tenant moves in.

They have also been barred from evicting tenants, although this eviction ban is expected to end this month.

The escalating rent costs in Scotland contrast with London, where rent growth has slowed significantly over the past year, with an increase of just 5.1%, down from 15.3% a year ago, according to Zoopla’s research.

Despite this, London’s rents remain the highest in the UK, averaging £2,121 per month, followed by Bristol at £1,389. The average UK household now pays £1,223 per month.

In Glasgow, the average rent is now £951 per month, while in Edinburgh, tenants pay an average of £1,263.

Both cities are among the few in the UK where rents continue to rise by double digits, at 10.9% and 11.5% respectively.

‘Led the way in capping most in-tenancy rent increases’

Scotland’s tenants’ rights minister, Patrick Harvie, recently said: “Our emergency legislation has led the way in the UK in capping most in-tenancy rent increases, protecting tenants across Scotland from the worst impacts of the cost-of-living crisis.

“The emergency nature of the legislation, which was approved by parliament, means the rent cap cannot be extended beyond 31 March.”

He added: “But tenants still have significant rights from before the emergency act, and we have made use of powers to make sure any rent rises are more manageable.”

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