The rent freeze and moratorium on evictions in Scotland is changing from April 2023.
In 2022, a rent freeze and moratorium on evictions was introduced in Scotland under the Cost of Living (Tenant Protection) (Scotland) Act 2022 - and now, this will extend past the original end of March deadline. Here's how the rules will change in Scotland, and the ongoing debate about a rent freeze in Wales and England.
What rent freeze rules are currently in place in Scotland?
The first version of the measures has been in place since 6 September 2022, and will last until 31 March 2023. The freeze currently applies to both the private and social housing sectors in Scotland.
These measures set rent increases at 0%, with certain prescribed costs for landlords - such as interest payable on the property’s mortgage or property insurance premiums - considered eligible to increase rents up to a maximum of 3%.
Prevention of eviction enforcement is in place for tenants, with some exceptions. Unlawful evictions could also see increased damages of up to 36 months’ rent.
What's changing from 1 April 2023?
The Scottish government has confirmed that the measures will continue past these dates, with amendments. From 1 April 2023 until 30 September 2023, a new rent cap of 3% in most instances - or up to 6% for prescribed costs - will apply to the private rented sector. The eviction restrictions will also remain in place.
A separate agreement was reached between the Scottish government and the Scottish Federation of Housing Associations to keep rent increases below inflation for the next financial year in the Scottish social housing sector.
Will the rent freeze become permanent?
The next concern for agents and landlords is whether the rent cap will become permanent under the Housing Bill due in 2023.
Patrick Harvie, the Scottish government’s housing minister, has said: “Long term rent control measures will be included in the forthcoming Housing Bill which is expected to be introduced as soon as possible after the 2023 summer recess.
"This will allow the Scottish Government to meet its commitment to rent controls by 2025.”
Propertymark has said it will continue to fight against caps to make sure that the private rented sector in Scotland continues to be “investible.”
Will there be a rent freeze in Wales?
As soon as the rent freeze was announced in Scotland, speculation arose around whether England and Wales would follow suit.
In Wales, the response was swift and concise. Labour voted down a plea by Plaid Cymru to freeze rents in the private rented sector, saying that it would have “very serious unintended consequences”.
The social housing sector, however, will see a rent cap of 6.5% applied from April 2023.
Will there be a rent freeze in England?
In England, the rental market in London prompted its Labour-party mayor, Sadiq Khan, to host a summit addressing market pressures and the necessity of introducing rent caps.
The NRLA highlighted that rent controls would focus on the “symptoms” of the rental market’s challenges, rather than their “root cause”.
The current Conservative government previously shared its view on rent caps in its A Fairer Private Rented Sector white paper, saying that it “does not support the introduction of rent controls to set the level of rent at the outset of a tenancy.”
However, mayors of England's three biggest cities have called for a rent freeze and ban on evictions too during the cost of living crisis.
The Department for Levelling Up, Housing and Communities has reiterated the support available to tenants during the crisis, such as the £400 towards energy costs. This suggests that an English rent freeze may be avoided until at least the next Labour government.
How does the lettings industry feel about the rent freeze in Scotland?
When the law was introduced, predictions flooded in on the potential impact on stock
levels - particularly if the same legislation were applied UK wide.
Survey results from Propertymark found that 85% of letting agents had landlords that had shown interest in selling their properties in Scotland - with 68% of respondents saying
that they’d already seen an increase in notices to sell due to the freeze. However, this survey represents the opinion before the expected amendments to the rent cap were announced.
David Alexander, CEO of DJ Alexander Scotland Ltd, believes that lifting some of the restrictions rather than keeping a rent freeze at zero percent was the right decision.
“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,” he says. “To do anything else would have simply exacerbated the current housing shortages.”
