The Scottish Government is poised to prolong its rent cap for an additional six months, despite facing strong opposition from the lettings industry.
Patrick Harvie, the Green Party minister responsible for housing in Scotland, intends to extend the existing emergency measures. These measures were introduced in October last year as part of a deal between the Scottish National Party and the Greens.
Initially, the cap prevented any rent increase, but Harvie raised it to three percent from March this year until September. He now plans to seek a further extension, pushing the cap well into spring 2024.
Under the proposed extension, most private rent increases during a tenancy would remain capped at three percent. However, private landlords could apply for increases of up to six percent to cover specific cost rises, provided they provide substantial supporting evidence.
Additionally, the extension would maintain the current eviction ban, with a few exceptions for specified circumstances.
In a recent statement, Harvie emphasized the importance of these measures, stating, “As the cost of living crisis continues, these measures are providing crucial support to tenants by ensuring stability in their housing costs and offering additional eviction protections.”
Harvie also stressed that the temporary legislation focuses on providing similar protections to private renters as those enjoyed by social housing tenants, who have already agreed on rent increases through consultation.
Acknowledging the impact of rising costs on some landlords, Harvie explained that the option of increasing rents by six percent in specified circumstances allows them to recover some of the additional expenses associated with their rental properties.
“If approved by Parliament, the final date of 31 March 2024 would mark the maximum duration for the rent cap and eviction protections. We will review the necessity of these measures and assess whether they remain justified, balanced, and proportionate in light of the financial pressures faced by rented households and landlords,” added Harvie.
He also mentioned ongoing discussions on transitioning out of the emergency measures, as the government continues to collaborate with stakeholders to develop and implement reforms in the rental sector.
At the beginning of 2023, when the cap was initially raised from zero to three percent by Harvie, Propertymark voiced its opposition to such caps on private rents. The organization stated, “Propertymark has actively participated in the development and implementation of the Cost of Living Act, consistently representing our members’ views. While a rise to three percent may provide some relief, rent cap legislation creates uncertainty and falls short.”
Propertymark further expressed concerns regarding the SNP and the Scottish Green Party’s intention to pursue permanent rent controls through a new Housing Bill slated for this year. The organization emphasized the need to maintain an investable residential property sector in Scotland and pledged to continue campaigning for that cause.