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WARNING: Scots rent cap will 'shrink stock and push up costs for tenants'

scottish parliament rent cap

The Cost of Living Act is prompting greater numbers of landlords to quit the sector in Scotland or increase rents between tenancies to cover future costs.

Giving evidence to the Scottish Parliament's Local Government, Housing and Planning Committee on the temporary legislation, Propertymark explained that the majority of letting agent members continued to see landlords exit the market.

It told MSPs that when asked in November 2022, 83% said landlords would be inclined to increase rents between tenancies, because of the Act, to cover impending and rising costs; by February, this had risen to 94%. Meanwhile, 78% of agents now reported an increase in notices to sell due to the temporary measures, up from 68% last November.

Temporary pause

The Scottish government has indicated that it plans to continue both the temporary pause on the enforcement of eviction orders in certain cases and the rent cap for tenants in the PRS beyond the initial expiry date of 31st March, but recently pedaled back from a 'freeze'.

Timothy Douglas (pictured), Propertymark's head of policy and campaigns, says the crux of the housing problem is that demand is far outstripping supply, yet the legislation is having the opposite effect - of pushing landlords out of the sector.

'Rent increases have never been a significant factor in the private rented sector, yet this legislation and the threat of further rent controls is forcing landlords to put up rents between tenancies to cover any future cost implications,'� adds Douglas.

'Costs have increased for tenants, but also for landlords. Those on variable mortgages have seen their payments increase much higher than 3%, not to mention the other costs involved in property management.'�

Pic credit: Scottish Parliament/Twitter


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