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.”
Holyrood’s Local Government and Communities Committee is seeking views on a new Bill which aims to increase private tenants’ protection by limiting rent increases and allowing them to seek a “fair” rent.
The Fair Rents (Scotland) Bill, a Member’s Bill from Pauline McNeill MSP, would prevent a landlord of a private residential tenancy from increasing rent in any year by more than the Consumer Price Index (CPI) plus 1%.
The Bill seeks to provide greater protections for private tenants by allowing them to apply at any time to a Rent Officer for a ‘fair open market rent’ to be set for a property. In deciding the application, the Officer would take into account matters like whether the property has poor energy efficiency or is in a bad condition.
The Bill would also make private landlords enter more detailed information about their property in the Scottish Landlord Register, including the monthly rent charged.
Local Government and Communities Committee Convener James Dornan MSP said: “The proportion of households in private rented housing now stands at just under 15%.
“As the private rented sector in Scotland has grown over the last couple of decades there have been various reforms to tighten the regulation of landlords and give tenants more rights. But the stated ambition behind this Bill is to change the balance of power further. It would cap rent increases to 1% plus CPI and to allow tenants more scope to challenge rents.
“We are keen to hear views about whether this further change is necessary and whether the provisions in the Bill are workable and will have the intended impact.
“We also want to find out what the financial impact of this Bill would be upon private tenants, landlords, the wider rented sector and others, and we welcome the opportunity to hear views on this proposed legislation.”
The cap on rent rises imposed by the Bill and the right to seek a “fair open market rent” apply to holders of ‘Private Residential Tenancies’ which have been the standard type of tenancy since 2017. The Bill will not impact rent-a-room agreements where the lodger rents in the owner’s home.
