Rent Cap Extended for Final 6 Months to March 2024

Patrick Harvie said;

“As the cost-of-living crisis continues, these measures are giving important support to tenants, providing them with much-needed stability in their housing costs and additional eviction protections.

As the social housing sector have agreed their rents in consultation with their tenants, the focus of this temporary legislation is on providing private renters with similar protection.

We know some landlords are impacted by rising costs too. The option of increasing rents by 6% in specified circumstances ensures landlords who may be impacted by the cost-of-living crisis can recover some increased costs associated with their let property.

The final date of March 31, 2024 would be as long as the rent cap and eviction protections could run if approved by Parliament.

The necessity of these measures is being kept under review and we will continue to assess whether they remain justified, balanced and proportionate based on the financial pressures rented households and landlords are facing.

We are also looking at how to transition out of the emergency measures, and we continue to listen to and work hard with stakeholders to develop and deliver rental sector reform."

In response the UK Apartment Association (UKAA), the body which represents the Build to Rent (BTR) sector has broadly welcomed Patrick Harvie's statement.

Gillian McLees, Director of BTR at Rettie in response has said:

"For the BTR industry to deliver the long-term quantity of good quality, professionally managed homes needed to help tackle the critical housing crisis in Scotland (the future BTR pipeline in Scotland currently stands at nearly 9,000 homes, Rettie, 2022), confidence is required of investors, developers, contractors, and all those involved right through to the customer. This confidence is built through clarity, certainty, and consistency – all of which are undermined by rent control.

In principle, the UKAA opposes rent control in any form as it lowers confidence and inhibits the BTR industry’s ability to deliver customer, community and investor value. Investors invest for the long term, for stable returns and if rent control is in play, it can disrupt and harm the certainty of those returns.

The limited BTR stock in Scotland has been well received by the market to date but following the rent cap announcement, investor confidence has been affected. Some investors are already pausing and / or withdrawing from the market entirely which can only harm the delivery of these much-needed, good quality homes.

The Scottish government has made social housing providers exempt from this cap. As both social landlords and BTR providers hold the same aspirations to deliver good quality housing, in good quality communities, the UKAA argues that the BTR industry should be treated in a similar manner.

It is important that the BTR industry is part of the conversation around this issue and the UKAA and its Scottish Hub stand ready to consult with the Scottish government as we have historically done, during the Parliamentary updates on the emergency legislation.

The UKAA is well placed and ready to be an effective conduit between our members, the BTR industry and the Scottish government, and will work with all stakeholders to ensure a full understanding of the impact of rent control. This UKAA’s proactive engagement in Scotland will prepare us for any future discussions with governments should rent control be consider in any other parts of the UK. We will always take a robust and cooperative position should this occur."