The Scottish government has allowed the country’s controversial rent control scheme to expire, allowing landlords to raise rents freely again – at least for now.
Rent controls have been in place in Scotland since the pandemic, and in their most recent form landlords could not increase rents by more than 6% in most cases – or more than 12% where they were significantly below market rent.
From April 1, tenants will still be able to appeal large increases, but the First-tier Tribunal or Rent Service Scotland (RSS) will be able to set the rent at open market value no matter what the current rent is. If the landlord requests a higher rent that is still below market value, the Tribunal or RSS will moreover be able to award a bigger increase (up to market value) than they asked for.
Short term gain, long term pain?
Property industry figures welcomed the end of rent controls, but a lot of damage may already have been done. By pressing ahead for so long in the face of warnings from the industry, politicians may have undermined landlord confidence. Buy-to-let investment dropped to a 15-year low in 2024.
Rent controls were also arguably ineffective for tenants. Scotland had the fastest rental growth of any UK region in 2023, according to Zoopla, and outpaced most UK regions (and the UK average) in 2024.
But the end of temporary rent controls in Scotland doesn’t mean they are off the table permanently. The Housing (Scotland) Bill currently going through the Scottish parliament includes permanent rent controls, in the form of capping rent increases at Consumer Price Index inflation plus 1%, up to a maximum of 6%.
However, the details of the bill aren’t yet final. The government plans to hold a consultation this spring covering how and when landlords can make above-cap rent increases – or be exempted from rent control entirely. No matter the outcome, the bill isn’t expected to come into effect until 2027-28 – giving landlords time to bring their rents up to market level while they still can.
