The Scottish Government has laid before parliament for approval its proposed regulations on rent increases from 1 April 2024, when the emergency rent cap ends.
It is concerned that after a period which prevented (and then severely limited) rental increases, an immediate return to market rents might be difficult for tenants to cope with.
These 12-month long transitional arrangements seek to offer a softer landing for tenants, while still allowing landlords some rental growth. You can see from the table below that the potential for increases starts to taper. The Scottish Government’s proposal does not seek to address the question of what happens after the expiry of this 12-month transitional period, and we will need to wait a while longer to see what they propose.
The key points in the proposals are:
- the rent cap/eviction moratorium under the Cost of Living (Tenant Protection) (Scotland) Act 2022 will end on 1 April 2024.
- the current cap of 3% (or 6% in exceptional circumstances) on rent increases will still apply to all rent increase notices issued on or before 31 March 2024.
- the rent adjudication process will be amended for 12 months until the outcome of consultations about more substantive changes/a new Housing Bill.
- tenants can apply for a rent adjudication if they are served with a rent increase notice. Rent Service Scotland or the First-tier Tribunal can then set rent based on the lowest of (i) open market rent (ii) the rent stated in the notice and (iii) a formula which in practice will work as follows:
|
Proposed Increase |
Permitted Increase |
|
1% |
1% |
|
2% |
2% |
|
3% |
3% |
|
4% |
4% |
|
5% |
5% |
|
6% |
6% |
|
7% (taper starts to apply) |
6.3% |
|
8% |
6.7% |
|
9% |
7% |
|
10% |
7.3% |
|
11% |
7.7% |
|
12% |
8% |
|
13% |
8.3% |
|
14% |
8.7% |
|
15% |
9% |
|
16% |
9.3% |
|
17% |
9.7% |
|
18% |
10% |
|
19% |
10.3% |
|
20% |
10.7% |
|
21% |
11% |
|
22% |
11.3% |
|
23% |
11.7% |
|
24% |
12% |
|
+24% |
12% |
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