Scotland hits landlords with a 3% rent cap

Scotland hits landlords with a 3% rent cap

0:02 AM, 20th January 2023, About 7 days ago 23

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Emergency measures that saw a rent freeze and an evictions moratorium being introduced in Scotland will now see rent rises capped at 3% in the private sector from April, the Scottish Government has revealed.

The enforcement of evictions will still be prevented ‘in most cases’ but landlords could raise rents by 6% if they apply to do so.

That is only to help cover certain increases in costs in ‘defined and limited circumstances’.

The changes to the Cost of Living (Tenant Protection) Act are still subject to Parliament’s approval.

Evictions are still banned for all tenants

And while evictions are still banned for all tenants – except in specified circumstances – the damages for unlawful evictions are being increased.

Also, the rent cap for student accommodation will be suspended which, the government says, recognises its limited impact on annual rents that are set on the basis of an academic year.

The temporary measures will start on 1 April and be extended to 30 September, with the option to extend for another six-month period if required.

‘Helped protect tenants facing the cost-of-living crisis’

Tenants rights’ minister Patrick 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.”

He added: “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.”

Allow rents to increase by 3% and by up to 6%

The statement by Mr Harvie that the Scottish Government will allow rents to increase by 3% and by up to 6% in the private rented sector from 1st April is a sign ‘that they have seen sense’.

That’s according to a leading property firm DJ Alexander, which is the largest lettings and estate agency in Scotland.

David Alexander, the firm’s chief executive officer, said: “This shift in policy to allow rent increases in the private rented sector from 1 April onwards is a sensible approach following serious concerns from all parties.

“This will hopefully provide some breathing space for the private rented sector which has seen investment slow or stop, a reduction in the number of homes available, and increased pressure on tenants who have been unable to find appropriate homes.”

‘A rent freeze is a knee-jerk reaction’

Oli Sherlock, the director of insurance at Goodlord, said: “A rent freeze is a knee-jerk reaction which, although it might help some tenants in the short run, is unsustainable and has the long-term impact of pushing more landlords out the market and squeezing the availability of rental homes.

“A price cap is a more sensible step forward than a freeze, but it’s still not addressing the key issues facing the market today.”

He adds: “We have an economic and regulatory environment that is driving landlords away from the sector and not enough homes to go around.

“Unless decision makers explore long-term ways to address the housing shortage and keep landlords from leaving, sticking plaster solutions are only delaying the impact of rent rises on tenants.”



Comments

Mervin SX

0:07 AM, 20th January 2023, About 7 days ago

Rent freeze and now a rent cap!!

Will the Scottish government also impose freezes and caps on rising costs of tradespeople and mortgage lenders? Probably not 🤦🏾

Sadly, more landlords will have no choice but to quit the PRS.

DSR

10:32 AM, 20th January 2023, About 7 days ago

outrageous! A ban on allowing PRIVATE owners from offering a service based on FREE MARKET ECONOMY principles.

Has China purchased Scotland overnight????.

Beaver

11:14 AM, 20th January 2023, About 7 days ago

Reply to the comment left by DSR at 20/01/2023 - 10:32
Scotland is a single-party state with an extreme left-wing government. Expect more of the same.

Does anybody know how this 'eviction ban' works? What happens if you've rented our your home but you now need to get it back for your own family members to live in? Can you still do that or does this 'eviction ban' mean that you've lost control of your home?

Nelly101

11:15 AM, 20th January 2023, About 7 days ago

This is terrible ,what right do they have to force some landlords into debt.It is not a landlords responsibility to fund a tenant who can’t afford the rent.I don’t see anyone putting a cap on interest mortgage rates

Private Housing Provider

11:27 AM, 20th January 2023, About 6 days ago

Our government controls private property, rental prices, abilities to operate freely in an open market.

This is not a free open capitalist society, no free open market. 100% controlled by government.

3% rise cap for rent and private housing providers while the same government allows bankers to increase interest with no limits and allowing oil, petrol, gas and electric to increase 100%. Same old protection of wealth for the elite but supressing anyone below those elite 'friends'.

Peter Cochrane

12:01 PM, 20th January 2023, About 6 days ago

A proud Scotsman who cannot believe the government is putting legislation like this in place. If I want to remove a non paying tenant, I have to go to tribunals to ask permission to allow the tenant to be removed even though they’re effectively stealing from me. I now can’t increase rents anywhere near in line with mortgage costs. Why does anyone think this is a good idea. The country better get ready to look after lots of people seeking housing as landlords will sell up because we’re at least allowed to do that.

moneymanager

12:31 PM, 20th January 2023, About 6 days ago

The Minimum Wage was supposed to be a floor but was always seen by the enlightened as going to become a target for too many employers. As with that, increase restricted landlords will be likely to ALWAYS increase by that capped amount.

Crouchender

13:16 PM, 20th January 2023, About 6 days ago

Reply to the comment left by moneymanager at 20/01/2023 - 12:31
I am not letting in Scotland but this was the way of SNP preventing their idiotic rent freeze policy from back firing when the rent freeze went in thaw mode! i.e We were all anticipating after a rent freeze ou want to raise the rents to cover the loss in rental income period during the freeze. So by putting this cap in they effectively prepares a future narrative of SNP government knows best for tenants and the Conservatives in England do not as the SNP will be well aware of the year on year rent increases in England last year and still going up this year too. So voters will see that the SNP policies make their renters life easier so expect the Labour government laying 'in wait' to 'adopt' the SNP policies with a softer narrative as they don't want to be seen as hard left as SNP! Remember in the Republic of Ireland you can't raise rents above a very small % threshold unless you have made substantial improvements to a property. Look it up. Madness.

Beaver

13:30 PM, 20th January 2023, About 6 days ago

Reply to the comment left by Crouchender at 20/01/2023 - 13:16
So does anyone know the answer to the question:

"Does anybody know how this 'eviction ban' works in Scotland? What happens if you've rented out your home but you now need to get it back for your own family members to live in? Can you still do that or does this 'eviction ban' mean that you've lost control of your home?"

Mr.A

15:07 PM, 20th January 2023, About 6 days ago

There are some circumstances that you can get your property back،like you or a family member are moving in or you are selling up.
But they will check ( you will still need to go through the first tier tribunal and do a bit of begging and look humble ) and if you have lied about your intentions, and relet the property be ready for a very big fine and probably a mark against you being a fit and proper person to let property.
So its not worth making it up to remove a tenant .
I've not done this but thats what the guidance says .

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