Rent caps and prescribed costs safeguard
On 19 January Propertymark attended a meeting regarding the Cost of Living (Tenant Protection) (Scotland) Act 2022. During the meeting, the Minister outlined plans subject to approval by the Scottish parliament. From 1 April, any increases in private rents will be capped at 3% and the prescribed costs safeguard for private landlords will be amended, allowing them to apply for increases of up to 6% to help cover certain increases in costs in defined and limited circumstances.
Evictions continue to be frozen
Enforcement of evictions will continue to be prevented for all tenants except in a number of specified circumstances and increased damages for unlawful evictions of up to 36 months’ worth of rent will continue to apply.
This is emergency legislation and therefore can be extended for two additional six-month periods. A Housing Bill will now be introduced as soon as possible after Summer recess this year.
Disparity between social and private sectors
The rent cap for social sector accommodation will expire at the end of March following a voluntary agreement on an agreed approach to rent setting for 2023/24 with the aim that rents remain affordable but still support continued investment in the sector.
The rent cap for student accommodation will be suspended. The Scottish Government has acknowledged that with annual rents set on the basis of an academic year, this did not achieve the stated aim.
Challenge
At the meeting with the Minister, Timothy Douglas Head of Policy of Campaigns at Propertymark challenged the Minister on the rental data and statistics he and officials are using to monitor the private rented sector – an answer will be provided at a later date.
Following the meeting, a coalition of sector partners agreed to instruct Counsel to lodge a Judicial Review petition challenging the rent cap and eviction legislation.
Propertymark along with other sector stakeholders have been requesting a PRS Working Group with the Scottish Government in seeking support specifically for those landlords and tenants that are struggling with the Cost of Living crisis. This has been in place for social rented sector providers. In the meantime, the Scottish Government has enforced a ban on evictions and a rent cap which has led directly to housing providers across the private rented sector exiting the market.
Propertymark has been engaged fully in the development and implementation of the Cost of Living Act, representing our members’ views every step of the way.
Whilst rent cap legislation continues to create uncertainty, agents and landlords will welcome a rise to three per cent, but this is clearly not enough.
The bigger concern is also the SNP and Scottish Green’s desire to push on with permanent rent controls with a new Housing Bill to be produced this year.
It is vital that we ensure that the residential property sector in Scotland is investible and that is what Propertymark will continue to campaign for.
