Ministers plan further extension of rent cap on private housing

Ministers intend to extend Scotland’s private sector rent cap by a further six months, the Scottish Government has announced.

Tenants’ rights minister Patrick Harvie said the Scottish Government will seek the approval of Parliament to introduce a final extension, taking the measure up to March 31, 2024 at the latest.

Emergency regulations will cap the vast majority of private rent increases at 3%, after the legislation was amended from 0% in March.

It is likely to cause controversy with landlord representatives who have mounted a legal challenge in the Court of Session amid claims the cap has led to a “material adverse impact on their income and capital”.

Scotland’s highest civil court heard from representatives of the coalition, including the Scottish Association of Landlords, Scottish Land & Estates and the Church of Scotland, who said interest hikes have reached around 127%.

The extension proposals, if agreed by MSPs, will allow landlords to apply for an increase of up to 6% to help cover certain increases in costs over a specified time period.

It will also see the suspension on evictions continue, except in a number of exceptional circumstances, with increased damages for unlawful evictions of up to 36 months’ worth of rent remaining in place.

Mr Harvie said: “As the cost-of-living crisis continues, these measures are giving important support to tenants, providing them with much-needed stability in their housing costs and additional eviction protections.

“As the social housing sector have agreed their rents in consultation with their tenants, the focus of this temporary legislation is on providing private renters with similar protection.

“We know some landlords are impacted by rising costs too. The option of increasing rents by 6% in specified circumstances ensures landlords who may be impacted by the cost-of-living crisis can recover some increased costs associated with their let property.”

The current protections were extended until September, with Mr Harvie adding: “The necessity of these measures is being kept under review and we will continue to assess whether they remain justified, balanced and proportionate based on the financial pressures rented households and landlords are facing.

“We are also looking at how to transition out of the emergency measures, and we continue to listen and work hard with stakeholders to develop and deliver rental sector reform.”

The move has been welcomed by the Living Rent tenants union, which said the extension will be a “huge relief” to tenants struggling with the cost of living.

Aditi Jehangir, the union’s secretary, urged ministers to implement rent controls by the time the cap expires.

However, Sarah-Jane Laing, chief executive of Scottish Land & Estates, branded the announcement “utterly tone deaf” to the concerns raised by the private sector.

She said: “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.”

Social landlords are required to keep any rent increases below inflation in 2023/24.