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Scotland unveils transition plan from its rent cap – but will still suppress rents
12:01 AM, 8th January 2024, 2 years ago
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The Scottish Government has unveiled a scheme for rent arbitration procedures to help restrict big rent rises when the country’s rent cap ends in March.
Propertymark says that Patrick Harvie, the minister for zero carbon buildings, active travel and tenants’ rights, has been in touch about what happens when the government transitions from the Cost of Living Act.
The aim is to safeguard tenants from excessive rent hikes.
The current rent cap ending, which was confirmed last autumn, will see landlords looking at increasing rents.
Adjudication methods for rent rises
However, the law permits officials to adjudicate on rent rises if a tenant refers a rise to them.
The government says it wants to see a smooth transition from the cap and avoid tenants being hit with large increases.
This move would last for 12 months with occasional evaluations to check for its relevance.
The guidelines for revising the rent arbitration include these three benchmarks:
- The prevailing open market valuation
- The landlord’s suggested new rent
- The uppermost ‘reasonable’ rise for the lease, determined by a new tapering formula.
Determine whether a rent increase is excessive
Propertymark says the tapering method would use a percentage to determine whether a landlord’s rent increase is excessive or not.
Each case will use a formula to work out what the increase should be when comparing the current rent and the market rate.
The Scottish government is also planning to introduce a rent ceiling that would effectively cap excessive increases.
Propertymark says it understands the frustration felt by members as a result of these measures and the uncertainty it brings but it will continue campaigning against rent controls and influence Scottish Government proposals.
Tags:
Cost of Living Act, Housing Legislation, Patrick Harvie, propertymark, Rent Adjudication, Rent Control, scotland, tenant protection
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Member Since September 2018 - Comments: 3504 - Articles: 5
7:09 AM, 8th January 2024, About 2 years ago
This will be interesting. As a result of the previous rent caps, there is going to be a huge rise in LL now instigating one, and the current market rent will come into play as one of the ‘measures’ by which an increase is determined.
Bearing in mind that this has now probably increased beyond what it would have done without the cap being brought in at all then the outcome is….
higher rents than there would have been! Proof the Scottish Gvt don’t give a crap about tenants.
“tapering method would use a percentage to determine whether a landlord’s rent increase is excessive or not” How can you determine what is excessive or not if you then agree that a market rate exists?
Who ‘adjudicates’ on all of this and will they have enough people to staff this process?
Member Since November 2016 - Comments: 99
11:13 AM, 8th January 2024, About 2 years ago
Any tapering calculation has to take account of the length of the tenancy and should not just be from the last rent increase.
Many Landlords did not put rents up when Mortgage Rates were low and the Rents significantly lag Market rents.
Mortgage payments on Interest only BOE base rate tracker mortgages have gone up 200% so Landlords need to raise rents to closer to the Market Rent to reflect this. During this period Landlords in Scotland were restricted to a 3% increase for 20 months.
There are already accepted ways of Accounting for Inflation for Capital Gains Tax so there is no need for a new calculation to reinvent the wheel.
There needs to be balance and fairness between the Tenant and the Landlord or the Landlord will have no choice but to sell up and the Tenant will have to find a new home at the Market rent.
Member Since September 2022 - Comments: 149
1:10 PM, 8th January 2024, About 2 years ago
Just what has Patrick harvie achieved
1. Rents up
2 . Accommodation down
3.PRS turmoil
4 Landlord uncertainty
5 lost trust .
Best to let the market dictate the level , the more Accommodation there is the more rents will come down, to a point .
But unfortunately a lot of Good landlords have already sold due to burgeoning red tape , rent controls and eviction bans .
The Damage has been done , so we’ll done Partick.
Member Since September 2023 - Comments: 335
3:06 PM, 8th January 2024, About 2 years ago
So when a council introduce a license scheme and charge ridiculous fees to operate it , you pass that on to the tenant in a rent increase is this excessive charging of rent?
Member Since February 2020 - Comments: 29
10:57 AM, 9th January 2024, About 2 years ago
That’s as clear as mud!
If I look at similar properties and they are charging £100 more is that reasonable?
Total and utterly incomprehensible garbage!
I would expect nothing else.
Member Since November 2016 - Comments: 99
3:32 PM, 9th January 2024, About 2 years ago
Just got correspondence from SAL to say that rent increases for properties that are currently below market value will be limited to 10-15% (final figure still to be announced).
This may sound like a lot but with mortgage costs going up 200% it’s just a drop in the ocean.