Continued rising costs for landlords that impact increasing rent levels for tenants and the mismatch between supply and demand are exacerbated by the ongoing regulations.

The Scottish Parliament’s Local Government, Housing and Planning Committee sought views on the Cost of Living (Tenant Protection) (Scotland) Act 2022 (Amendment of Expiry Date) (No. 2) Regulations 2023, which were laid in the Scottish Parliament on 1 June 2023.

The Regulations extend the effect of Part 1 of the Act for a further and final six months, providing that: 

• Most in-tenancy private rent increases would continue to be capped at 3%
• Alternatively, private landlords could apply for increases of up to 6% to help cover specific increases in costs in a specified period where these costs can be evidenced
• Enforcement of evictions would continue to be paused for six months for most tenants, except in several specified circumstances
• Increased damages for unlawful evictions of up to 36 months’ worth of rent would continue to be applicable

On 1 June 2023, the Minister for Zero Carbon Buildings, Active Travel and Tenants’ Rights, Patrick Harvie MSP, wrote to the Committee saying that the Scottish Government decided that it is necessary and proportionate for the Act to be extended until 31 March 2024, subject to approval by the Scottish Parliament

In the letter, the Minister said that over the period from 2018-2020, 63% of social rented households and 40% of private rented households did not have enough savings to cover even a month of income at the poverty line, compared to 24% of households buying with a mortgage and 9% of households owning outright. Consequently, rented sector households entered the cost of living crisis in a more vulnerable position than owner-occupiers.

Property agents speak out

Recent Housing Insight reports from Propertymark show that pressure on rents remains with 50% of responding agents reporting rents increasing month-on-month on average at their branch in April 2023, while the number of properties available to rent per member branch remained stubbornly low at nine in May. This is 12 per cent lower than in May 2022 when we saw the market starting to significantly overheat. Ultimately, the pressure of rising costs faced by landlords, higher demand for properties than the number made available, and a cap on rents in Scotland have combined to raise costs for tenants.

According to the property portal Zoopla, in April 2023, rent in London was 13.5% higher than a year ago, in Scotland it was 13.1% higher, and the Northwest of England saw a 10.5% increase. This amplifies Propertymark’s member feedback that landlords in Scotland are increasing rents between tenancies to cover their costs and anticipated costs due to a fear of ongoing rent control legislation.