Scottish MPs vote to cap rent rises and extend eviction ban

Propertymark warns 3% cap will drive yet more landlords out of the private rented sector.

rent law

Scottish MPs have voted to cap rent increases at 3% from 1 April and extend the country’s eviction ban – despite warnings it will speed up the exodus of landlords.

The new regulations follow on from the Cost of Living Act, which came into force in October last year, and placed a temporary ban on rent rises.

The measures, which only affect private landlords, will run until 30 September, with the option of being renewed for a further six months if required.

The social sector rent freeze has been replaced with agreements from landlords to keep any rent increase for 2023-24 well below inflation.

Meanwhile the rent cap for student accommodation is to be suspended, in view of its limited impact on rents set for an academic year.

Other points include:

  • Private landlords will be able to apply for a rent increase of up to 6% to help cover certain increases in costs in defined and limited circumstances
  • Enforcement of evictions will continue to be paused for up to six months except in a number of specified circumstances
  • Increased damages for unlawful evictions of up to 36 months’ worth of rent will continue to apply.
Rental shortage ‘will get worse’

However, Propertymark warned that the measures would only make the shortage of rented accommodation even worse.

According to the organisation, in December 2022, 91% of agents said landlords would be inclined to increase rents between tenancies to cover rising costs. When asked in February 2023 this had risen to 94%.

In December, just over two-thirds (68%) of agents had seen an increase in notices to sell due to rent freeze – by February 2023 that figure had risen to 83%. In addition, 92% of agents said landlords were looking to exit the sector

Confidence hit

In its submission to Scottish MSPs prior to the vote, Propertymark said the legislation was continuing to have an effect on landlord confidence.

“The majority of agents are still seeing landlords exiting the market… The crux of the housing problem is that demand is far outstripping supply – the legislation is having the opposite effect by pushing landlords out of the sector,” the briefing said.

“Rent increases have never been a significant factor, yet this legislation and the threat of further rent control is forcing landlords to put up rents between tenancies to cover any future cost implications.”

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