Minister Confirms Intention to Cap 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 30th 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.
– Graeme
I welcome this extension of protection for renters here in Angus and across Scotland during the ongoing cost of living crisis.
It strikes a considered balance in acknowledging increased costs facing landlords too, but caps rents to avoid instances of tenants being faced with unaffordable rises.
This remains emergency legislation, the impact of which will be continually assessed.
The Scottish Government is committed to supporting, with the powers available to it, all those struggling to make ends meet just now.
– Tenants Rights’ Minister, Patrick Harvie
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.
Background
The evictions moratorium prevents enforcement of eviction actions resulting from the cost of living crisis except in a number of specified circumstances.
Landlords can apply to Rent Service Scotland (RSS) to increase rent to partially cover specific costs. These include increased mortgage interest payments on the property they are letting, an increase in landlords’ insurance or increases in service charges paid as part of a tenancy – subject to an overall limit. This limit is currently set at 3% of total rent. From 1 April it will be increased to 6%. In effect, this retains the status quo of allowable rent rises of 3% above the cap. As set out in the first report on the Act to the Scottish Parliament, at 31st December 2022 RSS had received only 12 applications of this nature, of which 10 were valid.
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. Members of the Scottish Federation of Housing Associations and Glasgow West of Scotland Forum of Housing Associations have reported planned increases averaging 6.1%.
