Scottish Parliament approves 3% rent cap

Private rent increases will be capped at 3% and restrictions will remain on enforcement of evictions under measures approved today by MSPs.

The changes to the Cost of Living (Tenant Protection) Act will mean that from 1 April 2023:

• If a private landlord chooses to increase a tenant’s rent mid-tenancy, the increase will be capped at 3%
• Private landlords will alternatively be able to apply for a rent increase of up to 6% to help cover certain increases in costs in defined and limited circumstances
• Enforcement of evictions will continue to be paused for up to six months except in a number of specified circumstances
• Increased damages for unlawful evictions of up to 36 months’ worth of rent will continue to apply

These measures will be extended to 30 September, provided they remain necessary, with the option to extend for another six-month period if required.

As previously announced, the social sector rent freeze has been replaced with agreements from landlords to keep any rent increase for 2023-24 well below inflation. The rent cap for student accommodation is to be suspended, recognising its limited impact on annual rents set on the basis of an academic year.

Tenants' Rights Minister Patrick Harvie said:

“Our emergency legislation has given tenants across the rented sector additional protection as we continue to live through these challenging and uncertain economic times.

“It is clear that many households in the private rented sector in particular continue to struggle, which is why we are capping in-tenancy rent increases in the private sector at 3% from next month, with safeguards in place recognising the effects the cost of living crisis may have on some landlords. Our restrictions on evictions will continue across all sectors, with the social sector rent cap having been replaced with voluntary agreements from landlords to keep rents affordable.

“We will continue to keep these measures under review, ensuring they remain necessary and proportionate to the challenges at hand.”

Background 

The evictions moratorium pauses enforcement of eviction actions resulting from the cost of living crisis except in a number of specified circumstances. Evictions can be delayed for a maximum of 6 months while the measures are in force.

Landlords can apply to Rent Service Scotland (RSS) 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% of total rent. From 1 April the limit will be increased to 6%. In effect this retains the ability for landlords to raise rents at a level of 3% above the cap.

Under the agreement on social rents for 2023-24, COSLA has committed to keeping local authority rent increases to an average of no more than £5 a week. Members of the Scottish Federation of Housing Associations and Glasgow West of Scotland Forum of Housing Associations have reported planned increases averaging 6.1%.