Rent cap until 31 March 2023
We 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 0% and will remain until at least 31 March 2023. Although Ministers have a duty to keep this under review and respond accordingly if the situation changes during that time.
Under the emergency legislation it is not possible to give notice of a rent increase whilst the cap is at zero. A rent increase notice given to a tenant during this time will not be valid.
This means that landlords will not be allowed to increase their tenant’s rent while the cap is set at 0%, other than where they are able to show an increase in certain costs associated with letting the property, as set out in the legislation. Landlords will need to apply to a Rent Officer (part of Rent Service Scotland) before they increase rent on the basis of these costs and 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
We intend that the rent cap will apply to most existing tenancies in the private rented sector.
This includes existing:
- Private Residential Tenancies
- Assured tenancies
- Short assured tenancies
It is our intention to set the rent cap for private landlords at 3% from April 2023, subject to the agreement of the Scottish Parliament. Read more at: protections for tenants extended.
Tenancies which are not covered by the rent cap
- Some assured tenancies where rent increases are governed by contract – if you have an 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)
- New tenancies –landlords can set the rent for any new tenancy and 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 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 certain 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 3% 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 increased for 12 months.
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).
It is our intention, subject to the approval of Parliament, to amend this process for private landlords from 1 April 2023 which would allow them to apply for increases of up to 6% (an increase to the current 3%) to help cover certain increases in costs in defined and limited circumstances. Landlords would still need to apply to a Rent Officer (part of Rent Service Scotland) before they increase rent on the basis of these costs. They would still need to let the tenant know that they have made an application and follow the process set out in the act.
Proposed changes to the rent cap
The rent cap is set at 0% until at least 31 March 2023. Scottish Ministers will be able to change the level of the rent cap at any time whilst it is in force. Changing the rent cap will need the agreement of the Scottish Parliament.
Subject to the approval of Parliament, changes to the Act have been proposed that would mean that a new cap of 3% will be set from 1 April 2023. This would mean landlords would be able to serve a notice of 3 months to increase their tenant’s rent by up to 3% provided they have not already increased rent in the preceding 12 months.
Tenants will be able to apply to Rent Service Scotland to check that the new rent proposed by the landlord is not above what the cap would allow.
Landlords will still be required to comply with all relevant legislation applying to the rent increase process relating to the tenancy type including:
- the permitted frequency of rent increases
- the notice would need to comply with any rules on its form or content
- it would need to be validly served and the correct notice period complied with
If the Scottish Parliament approves the increase, any tenant with a private residential tenancy would therefore then need to be given three months’ notice before any rent increase could take effect. A rent increase notice could not be served unless the cap is above zero, which if approved by Parliament, would be on or after 1 April 2023.
Landlords may instead be able to apply to Rent Service Scotland to increase the rent for a property above the level of the rent cap, in order to take account of certain costs. The landlord will not, however, be able to both increase the rent in line with the cap and apply to have the costs considered. Landlords may only have one rent increase per 12 months. See ‘Situations where a landlord will be allowed to increase the rent’ above.
Scottish Ministers are not proposing any changes at this time that would allow landlords to raise rents more than once a year.
Social rented sector tenancies
From 6 September 2022, there is a temporary cap on rent increases during tenancies in the social sector. The cap is currently set at 0% and applies to existing Scottish secure tenancies and short Scottish secure tenancies.
The rent cap does not apply to social sector 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. As announced in December 2022, the social sector rent cap is being replaced with agreements from landlords to keep any rent increase for 2023 to 2024 well below inflation.
Scottish Ministers have therefore brought forward regulations that will expire the rent cap measures for the social sector from 26 February 2023. This will allow social landlords to ensure they meet requirements in relation to notifying tenants of rent increases from 1 April 2023.
From 6 September 2022, there is a temporary cap on rent increases during student residential tenancies.
The cap is currently set at 0% and applies to existing tenancies in college and university halls of residence and Purpose Built Student Accommodation (PBSA). As in the mainstream private rented sector, accommodation providers will still be able to increase rents between tenants.
We announced that we laid regulations for the suspension of the rent cap for student residential tenancies. Subject to Parliamentary process, this rent cap will be suspended on 30 March 2023. Students that have a private residential tenancy or another private tenancy type caught by the act will not be affected.
The rent cap took effect from 6 September 2022.
Rent increase notices issued on or after 6 September 2022 will be void. This measure stopped landlords trying to increase a tenant’s rent between the announcement and commencement of the emergency rent cap.
For college and university halls of residence and PBSA any rent increase notices issued on or after 28 October 2022 and before 30 March 2023 will be void.
Rent increase notices issued before 6 September 2022
For tenancies where a rent increase notice was issued before 6 September 2022, the rules and protections which were already set out in laws before these temporary changes were introduced will still apply.
This means that:
- landlords must have used the correct type of rent increase notice for the type of tenancy
- landlords must have given the tenant the correct amount of notice for the type of tenancy, and followed all other rules set out in law for rent increases for that type of tenancy
- tenants may have a right to challenge a rent increase by applying to Rent Service Scotland or to the Tribunal.
If you are not sure whether a rent increase notice you have received is valid, you may find it helpful to speak to an independent advice organisation.
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