Rent Cap goes on for another six months despite industry opposition

The Scottish Government looks set to extend its rent cap for yet another six months - despite widespread opposition from the lettings industry.

Green Party minister Patrick Harvie - who has responsibility for housing north of the border - wants to extend the current so-called emergency measures. 

The legislation was introduced in October last year, as part of a deal between the Scottish National Party and the Greens. 

Harvie raising the cap from a zero per cent rise to a three per cent rise for the period from March this year until September. Now he says he will seek its extension for a further six months, taking it well into spring 2024. 

This would mean most in-tenancy private rent increases would continue to be capped at three per cent. Alternatively, private landlords could apply for increases of up to six per cent to help cover certain increases in costs - providing they can produce substantial mitigating evidence. 

And the extension would mean the current eviction ban would also continue, except in a number of specified circumstances.

In his latest statement in the issue this week, Harvie says: “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 six per cent 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.”

At the start of 2023 - when the cap was lifted from zero to three per cent by Harvie - Propertymark expressed its opposition to such caps being imposed on private rents, stating: “Propertymark has been engaged fully in the development and implementation of the Cost of Living Act, representing our members’ views every step of the way. 

“Whilst rent cap legislation continues to create uncertainty, agents and landlords will welcome a rise to three per cent, but this is clearly not enough. 

“The bigger concern is also the SNP and Scottish Green’s desire to push on with permanent rent controls with a new Housing Bill to be produced this year. It is vital that we ensure that the residential property sector in Scotland is investible and that is what Propertymark will continue to campaign for.”

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