The Scottish government will extend its rent cap and eviction restrictions for another six months.
The Cost of Living (Tenant Protection) (Scotland) Act was due to expire at the end of September, but will now run for another six months until the end of March 2024.
The law sets a cap on rent increases within tenancies, and also sets the notice period for most evictions to six months. Tenants can be evicted more quickly if they no longer live at the property, have six months or more of rent arrears, or are being removed for antisocial or criminal behaviour.
Landlords can also evict a tenant if they need to move into or sell the property to avoid becoming homeless themselves.
Agents and landlords will have to wait and see if the government sets a new rent cap. For the first six months of the rent freeze no rent increases were allowed, but since April 2023 landlords have been allowed to increase rent by up to 3%. They can also apply to Rent Services Scotland for a rent increase of up to 6% to partially cover their increased costs, such as mortgage interest.
From October, the government could raise or lower that cap, or give landlords more flexibility when applying for higher rent increases. That would be welcomed if they do – given the rapid rise in buy-to-let mortgage interest rates, the 6% ceiling may not be high enough.
There are also questions around longer-term rent controls in Scotland. The Cost of Living (Tenant Protection) (Scotland) Act only allows for two extensions, meaning politicians will have to pass a new law if they want to cap rents beyond March 2024.
That could happen, as they have already used the two extensions allowed, but this would be fiercely opposed by property professionals. Groups including Propertymark, the National Residential Landlords Association and the Scottish Association of Landlords have all warned that the rent cap is damaging investment in housing and harming landlords and tenants.
Meanwhile, property professionals and politicians outside Scotland are taking an interest. The Welsh government is about to launch a consultation on private sector rent controls, and evidence from Scotland could help them come to a decision.
Other national headlines
Plan for rent controls a ‘disaster’ for Welsh landlords – Property118