Rent freeze U-turn welcomed by leading agent

Ruling politicians in Scotland have agreed that from April private rents can rise by 3.0 per cent in a 12 month period - and up to 6.0 per cent in certain circumstances.

Since the autumn private rents have been frozen with no increases allowed.

Evictions will still be banned except in the limited circumstances set out in legislation and the rent cap for student accommodation will be suspended "recognising its limited impact on annual rents set on the basis of an academic year".

Although the permitted rent increases are well below inflation, the shift away from the rent freeze represents a victory for campaigners, housing experts and lettings sector trade groups.

Scottish Government tenants and housing minister Patrick Harvie - who last year imposed a complete freeze - says: “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. 

“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 3.0 per cent 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.” 

Landlords can apply to Rent Service Scotland to increase rent to partially cover specific costs including increased mortgage interest payments on the property they are letting, an increase in landlords’ insurance or increases in service charges paid as part of a tenancy, subject to an overall limit. 

This limit is currently set at 3.0 per cent of total rent. From April it will be 6.0 per cent.

David Alexander, the chief executive officer of DJ Alexander Scotland Ltd, says: “This shift in policy to allow rent increases in the private rented sector from 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.

“Given the level of feeling from landlords, property investors, the build to rent sector, universities, the farming community, and others that the rent freeze was damaging the sector and reducing the availability of homes for tenants it is appropriate that the Scottish Government has seen sense and adopted a more conciliatory approach. To do anything else would have simply exacerbated the current housing shortages.”