We have introduced a temporary cap on in-tenancy rent increases. Ministers have the power to vary the rent cap while the emergency measures are in place.
The rent cap is currently set at 3% and will remain at that level until 31 March 2024. Although Ministers have a duty to keep this under review and respond accordingly if the situation changes during that time.
Under the emergency legislation, a landlord cannot increase rent above the current permitted rate of 3%.
Tenants will also continue to have the protections set out in relevant tenancy legislation regarding frequency of rent increases, the notice period required before rent can be increased, and the information which must be included in a rent increase notice in order for it to be valid.
Alternatively, where landlords are able to show an increase in certain costs associated with letting the property, as set out in the legislation, they can apply to a Rent Officer (part of Rent Service Scotland) before they increase rent on the basis of these costs. They must let the tenant know that they have made an application (see ‘Situations where a landlord will be allowed to increase the rent’, below).
Tenants should continue to pay their rent during this time. Anyone who is struggling to pay their rent, or worried about paying their rent in the future, should discuss this with their landlord as soon as possible. There are sources of help for people who are experiencing financial difficulties which may also be helpful.
Private rented sector tenancies
The rent cap applies to most tenancies in the private rented sector.
This includes most existing:
- Private Residential Tenancies
- assured tenancies
- short assured tenancies
Tenancies which are not covered by the rent cap
- some assured and short assured tenancies where rent increases are governed by contract – if you have an assured or short assured tenancy where the way your rent will increase is set out and this provision on rent increase is still legally in force then your rent will be able to increase in the way agreed in the contract
- Regulated tenancies under the Rent (Scotland) Act 1984 – these tenancies already have strong protections in place, and rents for these tenancies can only increase once every three years
- Common law tenancies – this includes arrangements like agricultural tenancies and lodger agreements (where you live with your landlord)
- rent setting at the outset of new tenancies – landlords can set the rent for any new tenancy which means they are allowed to put the rent up between one tenant moving out and the next tenant moving in
If you are not sure what type of tenancy you have, you should seek help from an advice organisation.
Situations where a private landlord will be allowed to increase the rent
We recognise that the impacts of the cost crisis may also be felt by some landlords.
For this reason, a landlord may apply to Rent Service Scotland to increase the rent for a property, in order to take account of any increase during the preceding six months in certain property costs).
The property costs which can be counted for this are:
- the interest payable in respect of any mortgage or standard security over the rental property
- any insurance premium payable by a landlord relating to insurance connected to offering the property for rent, for example ‘landlords’ insurance’ (excluding building and property insurance)
- any ‘service charge(s)’ related to the rental property that are recoverable from the tenant via their rent as part of the contractual arrangement between tenant and landlord
While the rent cap is in force, a landlord will be able to apply to Rent Service Scotland to increase the rent for a property to recover up to 50% of increases to these costs. This will only apply in cases where the increase in the costs has occurred in the 6 months before the landlord makes the application, and the landlord will need to provide proof of the increase in costs.
The landlord must give the tenant notice in writing when they make an application. To protect tenants, rent increases of this kind will be limited so that rents cannot increase by more than 6% of the existing rent.
The existing protections for tenants that only allow a landlord to raise rents once every 12 months will still apply. This means that an application to raise rent for certain costs can only be made if the rent has not been increased for 12 months at the proposed increase date.
If Rent Service Scotland agree that rent can be increased then they will let the tenant know. Any increase will not be able to be applied until 12 weeks after the date the landlord made the application.
A landlord or a tenant will be able to appeal a rent increase decision made by Rent Service Scotland by applying to the First-tier Tribunal for Scotland (Housing and Property Chamber) (the Tribunal) to have the calculations reviewed.
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