The Scottish rent rise cap and eviction ban on private residential lets is to be extended until 31st March 2024, the Scottish Government has announced. Once approved by parliament, this will be a six-month extension to the measures, which are in place under the Cost of Living Crisis Act.
The Cost of Living (Tenant Protection) (Scotland) Act 2022 legislation was introduced in October 2022 in response to the cost of living crisis, with the aim of supporting tenants. The emergency measures initially froze residential rents and restricted residential evictions. Amendments to the legislation came into force on 1st April 2023.
You can find full details of the Cost of Living Crisis legislation in our previous article, New rules for landlords in Scotland – The Cost of Living Crisis Act, and further details of the legislation amendments in our article Cost of Living Crisis Act amendments: Scottish rent rises capped and eviction ban extended
What are the current rules for private landlords in Scotland?
Scottish rents rise cap
Under the current Cost of Living Crisis Act legislation, a cap of 3% applies to a private residential rent increase notice served on or after 1st April 2023.
The legislation does offer a safeguard for private landlords, allowing them to apply to a rent officer at Rent Service Scotland to increase the rent by up to 6%, should this be necessary to help them cover increases in certain costs incurred in the previous six months. These costs include:
- mortgage/standard security interest
- insurance premiums (not general buildings/contents insurance premiums)
- service charges paid by the landlord, for which the tenant is responsible under the tenancy
Scottish residential evictions
Landlords can still serve notice as normal if they wish to end a tenancy. If the tenant doesn’t leave during the notice period, the landlord can apply to the First-tier Tribunal (Housing and Property Chamber) for an eviction order as normal. However, the legislation delays a landlord from enforcing an eviction order issued by the tribunal, in some circumstances for up to six months.
There are some exemptions to these, as explained in our previous article.
How long will the Scottish rent rise cap and eviction ban remain in place?
The legislation has already been extended from 1st April to 30th September 2023, and this new extension will extend the provisions of the Act for a further six months, until 31st March 2024. This is the final extension permitted by the Act.
Scottish Ministers are required to report on the impact of the legislation every three months and may suspend or remove the measures before March, should they be deemed no longer necessary. However, we would suggest this is unlikely to happen.
Why is the Cost of Living Crisis Act being extended again?
The Scottish Government has considered the current economic situation for those living in Scotland noted that those renting properties in the private rental sector remain in a more vulnerable position than owner occupiers.
You can find the government’s statement of reasons for proposing the second extension here, on www.gov.scot.
Scottish rent rise cap and eviction ban extension – Industry response
The Scottish Association of Landlords (SAL), together with Scottish Land and Estates (SLE) and Propertymark, launched a legal challenge to the legislation in January 2023, and a court hearing took place in Edinburgh on 4th May. A decision from the Court of Session is expected in the next few weeks.
Following the announcement of the legislation’s second extension, Scottish Land & Estates issued the following statement:
Sarah-Jane Laing, chief executive of Scottish Land & Estates, said: “Yet again, we have an announcement from the Tenants’ Rights Minister that is utterly tone deaf to the genuine concerns that have been expressed about his and the Scottish Government’s approach to housing supply.
“Ministers have been told in no uncertain terms that the more obstacles they put in place for landlords to operate fairly, the fewer properties there will be to rent and that affects tenants most of all.
“There is no reason to commit to extending these restrictions at this point in time and no evidence to support such a move. The reasons given by the Minister include very selective use of data to back up something he clearly wanted to do regardless of any evidence provided. As such we will continue to work with other partners in the sector to challenge these unwarranted measures.”
Response from At Home In Edinburgh
We understand the need for measures to support tenants who are more financially vulnerable than those who own property; however we do not believe that the Cost of Living Crisis Act legislation balances the need to protect tenants with the continuing cost pressures that landlords are experiencing.
We are therefore disappointed that the Scottish Government plans to extend the rent increase restrictions, putting further unproportionate financial burden on landlords. Considering the current legal challenge and concerns expressed by bodies representing landlords, we had hoped for a fairer proposal.
Increasing market rents
We had hoped that the rent cap would be lifted in September but as it is now to be extended, we suggest that landlords should consider it may be wise to taking advantage of the allowable 3% increase. Please note that should you increase the rent now, you cannot do so again for another 12 months.
What happens next?
We continue to await the findings of the judicial review petition – we hope these will be announced by the end of June.
For now, we remain committed to supporting tenants and landlords, to try and keep good tenants in their homes for as long as possible. Our actions include:
- ensuring tenants have access to the available assistance
- encouraging communication between tenants and landlords
- working with landlords to analyse and streamline their expenditure
- supporting landlords in proactive property maintenance and repair, ensuring maintenance costs are spread across the duration of a tenancy rather than concentrated at tenancy change.
Our friendly team are here to answer any concerns or queries you may have, so give us a call on 0131 229 4001, email us via our contact form or pop in and see us at 39 Warrender Park Road, Edinburgh, EH9 1EU.