Emergency measures to protect tenants during the cost of living crisis, including the private rent cap and additional eviction protections, will be extended for a further six months if approved by Parliament.
Tenants’ Rights Minister Patrick Harvie has confirmed proposals to keep the Cost of Living (Tenant Protection) Act measures in place until 31 March 2024 at the latest. This would mean:
Most in-tenancy private rent increases would continue to be capped at 3%
Alternatively, private landlords could apply for increases of up to 6% to help cover certain increases in costs in a specified time period where these costs can be evidenced
Enforcement of evictions would continue to be paused for six months for most tenants, except in a number of specified circumstances
Increased damages for unlawful evictions of up to 36 months’ worth of rent would continue to be applicable
Social rented sector tenants are protected by the voluntary agreement reached with social landlords on below-inflation rent increases for this financial year.
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 final date of 31 March 2024 would be as long as the rent cap and eviction protections could run if approved by Parliament. 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 to and work hard with stakeholders to develop and deliver rental sector reform.”
Minister confirms intention to cap private rents at 3%
Emergency measures to protect tenants will be extended, Tenants Rights’ Minister Patrick Harvie has confirmed, with private rents capped and enforcement of evictions prevented in most cases.
Subject to the approval of Parliament, changes to the Cost of Living (Tenant Protection) Act will mean that from 1 April 2023:
If landlords choose to increase private rents they will be capped at 3%
The safeguard for private landlords will be amended, allowing them to apply for increases of up to 6% to help cover certain increases in costs in defined and limited circumstances
Enforcement of evictions will continue to be prevented for all tenants except in a number of specified circumstances
Increased damages for unlawful evictions of up to 36 months’ worth of rent will continue to be applicable
The rent cap for student accommodation will be suspended, recognising its limited impact on annual rents set on the basis of an academic year
These temporary measures are intended to be extended to 30 September, provided they remain necessary, with the option to extend for another six-month period if required.
As announced in December 2022, the social sector rent freeze is being replaced with agreements from landlords to keep any rent increase for 2023-24 well below inflation.
Mr 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.
“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.”
COUNCIL RENTS: Under the agreement on social rents for 2023-24, COSLA has committed to keeping local authority rent increases to an average of no more than £5 a week.
HOUSING ASSOCIATIONS: Members of the Scottish Federation of Housing Associations have reported planned increases averaging 6.1%.
Emergency legislation giving tenants increased protection from rent increases and evictions during the cost of living crisis has become law after receiving Royal Assent.
The Cost of Living (Tenant Protection) Act gives Ministers temporary power to cap rent increases for private and social tenants, as well as for student accommodation.
This applies to in-tenancy rent increases, with the cap set at 0% from 6 September 2022 until at least 31 March 2023, effectively freezing rents for most tenants during this period.
Enforcement of eviction actions resulting from the cost crisis are prevented over the same period except in a number of specified circumstances, and damages for unlawful evictions have been increased to a maximum of 36 months’ worth of rent.
Tenants’ Rights Minister Patrick Harvie said: “Many people who rent their homes are facing real difficulties as a result of the cost of living crisis. While bills are rising for all of us, many tenants are more exposed as they are more likely to be on low incomes or living in poverty than other people.
“These measures aim to give tenants greater confidence about their housing costs and the security of a stable home.
“Some landlords may be feeling the effects of this crisis too. So while the primary purpose is to protect tenants, the emergency measures also include safeguards for those landlords who may be impacted.
“For anyone struggling with their rent, I would urge you to contact your landlord, an advice organisation or a tenants’ union to get help as early as possible.”
Edinburgh Lettings Agent Clan Gordon has been looking at what this means for the landlords and tenants that they represent.
Clan Gordon Managing Director, Jonathan Gordon, was part of the Scottish Government’s working Group which consulted on and helped them develop the Private Residential Tenancy (PRT) regime in 2017 which transformed the sector, introducing far greater protection for tenants and simpler procedures for landlords.
He said: “It is reassuring to hear Ministers say the new Cost of Living (Tenant Protection) Bill balances the protections that tenants need, with safeguards for those landlords who may also be impacted by the financial crisis.
“Under the new law, rents for existing private and social housing tenants cannot be increased until at least the end of March 2023 and can be extended for up to a further 12 months in two six-month blocks.”
So, what does this mean for landlords? Although the rent cap can continue at the current 0% rate or can be varied at ministers’ discretion, there is no cap or limit on increasing the rent when advertising for new tenants.
Jonathan continued, “Despite the media attention when this was announced this is not a ban on landlords ending tenancies. Landlords can still serve notice as normal if they wish to end a tenancy.
“Most tenants leave during the notice period when they find alternative accommodation so this restriction will have little effect here. If the tenant doesn’t leave during the notice period, the landlord can apply to the tribunal 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.
“Tenants can still be evicted for anti-social behaviour, lender reposition, abandonment, substantial rent arrears or if the landlords intend to sell or move back in to the property to alleviate financial hardship.
“We are also very pleased to see that as well as considering the tenants in this legislation, there are new safeguards for private landlords who find themselves impacted by the cost-of-living crisis.
“In certain circumstances, Landlords will be able to apply to Rent Service Scotland to increase the rent on a property to cover up to 50% of a limited number of specific costs, including increased mortgage interest payments and increases in landlords insurance or service charges.
“Interestingly the rent cap also applies to university halls of residence and other student accommodation where energy costs may be included in rent payments.
“There has been widespread concerns about increases to fuel prices, but the legislation prevents landlords passing on gas and electricity cost rises, in increased rents within the next six months unless the landlord can prove excessively high use of any utilities.
“Students are also covered by the same eviction laws and can only be evicted in cases of anti-social or criminal behaviour.
“Our approach has always been to encourage landlords to help us support any tenant who faces any difficulties including financial ones and in conjunction with our landlords we worked to support a lot of tenants financially and otherwise during the Covid pandemic and lockdowns.
“This is going to be a difficult road ahead and we are pleased that the government has put some measures in place to support and protect landlords and tenants.
The government advice website www.costofliving.campaign.gov.scot offers helpful tips, advice and guidance and our team will be very happy to offer advice about the new legislation to those affected by the current cost of living crisis.”
Last week I asked the Scottish Government about the rates of evictions after the COVID-19 pandemic, and if they would comment on evidence heard at the Scottish Parliament’s Social Justice and Social Security Committee that sheriff officers are “making up for lost time” since the pandemic (writes FOYSUL CHOUDHURY MSP).
I was astonished by the answer. Green MSP Patrick Harvie, in his capacity as Minister for Tenants’ Rights, said that I was “overstating the case”.
But the words he dismissed were not my own. I was simply presenting the Minister with evidence heard at the committee, from a worker on the front line of dealing with Scotland’s increasing problems with debt and arrears.
Not only was Harvie’s response dismissive and insulting to those working to aid people with problem debt, it demonstrates a Scottish Government that is asleep at the wheel when it comes to the growing housing and homelessness crisis.
The scale of that crisis was reported recently: a 2,052 per cent spike in court proceedings initiated by local authorities since the eviction ban ended; 366 households facing eviction in just the first quarter of this year; a 16.5 per cent rise in homelessness applications from the last quarter.
Any analysis of this grave situation must also consider other evidence heard by the committee, that the cost to local authorities of evicting a social tenant and putting them into the homelessness system is exorbitant, at an estimated minimum of £24,000 for a relatively simple case without complex challenges.
As we all discovered afresh during the pandemic, prevention is better than cure. The Scottish Government had been repeatedly warned of the potential for spiralling evictions after the scrapping of the evictions ban.
Scottish Labour have been clear that Scotland badly needs targeted support for tenants in social housing to avoid this coming storm. Instead, we get denial of the scale of the problem as reported by those on its front lines. Scotland deserves better than a government that dismisses the concerns of its most vulnerable citizens.
I am unfortunately sure that this will not be the last the Social Justice and Social Security Committee hears on this matter in this Parliament.
I will continue to monitor the situation as it potentially affects many vulnerable people in the Lothian region I represent, and continue campaigning for better targeted support for vulnerable tenants who have been hit by the dual shocks of the pandemic and the cost of living crisis.
We must have a compassionate approach. Allowing cases like these to be pushed into the homelessness system has no moral or financial case, and the Scottish Government should explore every avenue to avoid it.
Housing Secretary Shona Robison has welcomed new joint statements from landlords reaffirming their commitment to supporting tenants facing difficulties during the pandemic.
Signed by representative bodies for local authorities, housing associations and private landlords, the statements underline the sector’s commitment to only taking eviction action as a last resort.
The move follows this week’s announcement by Deputy First Minister John Swinney of a £10 million grant fund to support tenants struggling to pay their rent as a direct result of Coronavirus (COVID-19). The new fund takes the Scottish Government’s total support for tenants during the pandemic to almost £39 million.
Ms Robison said:“We have been clear from the outset that eviction action must be an absolute last resort, when all other avenues have been exhausted and a tenancy is no longer sustainable, so I welcome these joint statements from across the rental sector.
“The actions already taken by the Scottish Government, local authorities, housing associations and private landlords have been essential to avoiding evictions. Our new £10 million grant fund to support those who are struggling to pay their rent will shore up these efforts and extend more support to those facing crisis due to the pandemic. We will work towards making the grant fund available later in the year, and we will work with stakeholders over the coming weeks to develop the details.
“Paying rent is an important tenant responsibility, and tenants in financial hardship should engage directly with their landlord. When landlords are flexible with their tenants, signposting them to the range of financial support that is available and coming to agreements to prevent and manage rent arrears, this sustains tenancies and keeps people in their homes, benefitting everyone. These actions are crucial to move towards a sustainable and fair recovery from the impact of COVID-19.”
Cllr Kelly Parry, COSLA Community Wellbeing Spokesperson, said:“Local authorities have worked closely with tenants during the public health crisis, to support them to stay in their homes.
“This is something we were doing previously, but became even more important as our homes became even more important to us over the months of the pandemic. I am glad to see the sector restate their commitment to support tenants, and would encourage any tenant facing financial challenges to work closely with their landlord and seek advice and guidance early.”
Sally Thomas, Scottish Federation of Housing Associations Chief Executive, said:“Housing associations and co-operatives have always worked hard to help tenants who are struggling to pay their rent through tenancy sustainment services.
“This includes support to access benefits, budgeting advice, hardship funds and employability services – and this work has increased during the pandemic. They arrange manageable payment plans for tenants in rent arrears and will never evict someone who has agreed to, and is meeting, the conditions. Every effort is made to keep people in their homes.
“Any tenant who is struggling financially should contact their housing association or co-operative for support and help in paying rent.”
John Blackwood, Scottish Association of Landlords Chief Executive, said:“The overwhelming majority of tenants and landlords are working together to sustain tenancies during the pandemic.
“We welcome the Scottish Government emphasising that tenants have a responsibility to pay their rent, and encourage landlords to work with their tenants and always treat eviction action as a last resort. Our members have been working closely with tenants to reduce rents and write off arrears wherever possible.
“We strongly welcome the £10 million grant fund the Scottish Government has announced to help ensure tenants do not build up debt through rent arrears that they would struggle to repay. It is important landlords remain sensitive and constructive when working with their tenants, and that tenants struggling due to the pandemic speak to their landlord as early as possible.”
The shared statement on private landlords and letting agents working together with tenants to avoid evictions reads:
In responding to the effects of the coronavirus pandemic, there are many examples of private landlords and letting agents who have gone further than ever before to engage with tenants as more people find themselves in difficulty for the first time because of Covid.
As the country comes out of lockdown it is our shared commitment to make sure that tenants in hardship because of Covid continue to get support to pay their rent and living expenses and we will continue to work together collectively to ensure this is done.
The Scottish Government will continue to explore all options for policy and financial support to enable tenants to work with their landlords and letting agents; to be aware of their rights and responsibilities and support them to address financial hardship due to Covid-19.
Alongside existing support of extended notice periods, Discretionary Housing Payments and the Tenant Hardship Loan Fund this will include a new £10m Grant Fund package to support tenants in crisis who are struggling to pay their rent because of financial difficulty caused by the pandemic and help landlords to support them.
Where a private tenant has suffered financial hardship because of the Coronavirus pandemic, eviction action should be an absolute last resort, when all other avenues have been exhausted and a tenancy is no longer sustainable.
We advise that private landlords and letting agents continue to work to the following principles – for the remainder of the pandemic and throughout recovery:
Intervene early to keep people in their homes and give them the support they need to stay there
Landlords and letting agents should work with tenants who are struggling and support them to make arrangements to pay rent through a plan that is manageable for them in the long term
All landlords and letting agents should be flexible with their tenants, signposting them to the range of financial support that is available to help prevent rent arrears as part of the pre-action protocols required prior to any eviction application to the Tribunal or Sheriff Court.
Landlords and letting agents should act compassionately and quickly to support people who are in financial hardship and wish to work with their landlord to reduce arrears.
Paying rent is an important tenant responsibility and, where a tenant is able to do so, they must continue to pay their rent. To help do this, private landlords and letting agents from across the country have worked flexibly with their tenants to help them access the wide range of support on offer, and to sustain tenancies and prevent eviction action – as demonstrated in the annexed case studies.
Purpose of this statement
To set out the current levels of support available for private rented tenants and to reaffirm the flexible and supportive approach private landlords and letting agents should and in many cases have been taking to help keep people safe in their homes and avoid eviction where tenants are struggling through no fault of their own to manage their rent payments
To highlight real-life examples of private landlord practice since the start of the pandemic that has helped tenants in financial difficulty access support in order to sustain their tenancies.
A complimentary statement has been developed with social housing landlords.
The Scottish Association of Landlords PropertyMark The Scottish Government
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