The Scottish government has passed controversial new rules to freeze rents for at least six months.
Under the terms of the Cost of Living (Tenant Protection) Bill, Scottish Ministers have the power to cap in-tenancy rent increases for six months. The cap can be changed at any time but is currently set to zero. After the first six-month term, which ends on 31 March 2023, the government can continue capping rents at any percentage they choose for up to two more six-month terms.
At the same time, the bill protects tenants in the private and social sectors or student housing from eviction. Landlords will be able to evict tenants when there is antisocial or criminal behaviour, when the tenant is in “substantial rent arrears” (defined as six months’ rent or more), or where the landlord would otherwise face financial hardship.
The rent freeze only applies within tenancies. Landlords can set rent freely for new tenants. However, landlords who evict tenants illegally to take advantage of this could face big penalties: the bill has increased the maximum damages for an illegal eviction to 36 months’ worth of rent.
Private sector landlords can still raise rents if they face increased costs for their mortgage interest payments, landlord’s insurance or service charges. To do so, they must apply to a Rent Officer to be allowed, with evidence. They also can’t pass on the full cost to the tenant: the rent increase is capped at either 50% of their cost increase over the last six months or 3% of the rent, whichever is lower.
Could rents be unfrozen by industry action?
The bill has been particularly controversial as it was fast-tracked through the Scottish Parliament with very little time for industry input, and took effect retroactively from 6 September.
Industry groups, having been left out of the consultation process, are challenging the bill after the fact instead. Propertymark, the National Residential Landlords Association, the Scottish Association of Landlords and Scottish Land and Estates are looking into a joint legal challenge to the bill. If there are grounds for a challenge, it could begin within the month.
Meanwhile, activists have called for similar rent freezes in England and Wales. So far, though, they haven’t succeeded: a proposal to freeze rents was voted down last week in the Welsh Senedd, with Labour politicians saying that it could drive landlords out of the sector.
Other housing policy headlines
King Charles vets Scottish rent freeze legislation – The Herald
Greater awareness needed over Right to Rent – Property Reporter
‘Planning reset’ could reopen Tory splits over housebuilding – The Guardian
