United Kingdom

Industry shocked as Scotland bans rent increases

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The Scottish government has frozen rents and banned evictions in the private and social rented sectors until at least the end of March 2023, sending shockwaves through the housing industry.

The move is designed to help tenants deal with the spike in the cost of living, and comes as part of a bigger package of benefits increases and cost freezes in the country. 

Landlords and agents have reacted with dismay, warning it could permanently damage the country’s private rented sector. John Blackwood, Chief Executive of the Scottish Association of Landlords, said many of its members are now planning to sell up and quit the sector.

Anger was also directed at the lack of consultation. The rent freeze came in with very little warning and took immediate effect when relations between politicians, agents and landlords were already strained. Earlier this year, the Scottish government made all grounds for eviction discretionary, making it more difficult for landlords to retake possession of their properties.

The rent freeze might not affect all tenancies. Landlords in Scotland can only increase rent once a year, and those who have agreed rents with tenants since April may not feel its effects. Others may only have to wait an extra month or two to set new market rents.

Will the freeze be extended – or widened?

But landlords and agents worry that the rent freeze will be extended beyond next March, which politicians have already said could happen. The inflationary crisis that inspired it is likely to continue for a while: inflation is expected to stay high throughout 2023. 

There’s already precedent for such a move: Scotland’s eviction ban was extended several times during the COVID-19 pandemic, and the permanent eviction reforms in the Coronavirus (Recovery and Reform) (Scotland) Bill were based on earlier temporary ones. If the same thing happens again, today’s temporary rent freeze could become tomorrow’s permanent rent control.

The idea of a rent freeze is getting some attention outside Scotland too. Rent increases for social housing in England are being capped below inflation for next year. Pressure groups including Generation Rent have called for a rent freeze and additional eviction protections in the private rented sector, as has Conservative MP Natalie Elphicke – prompting a strong response from the industry. 

Other letting agent headlines

Agents pay tribute to Her Majesty Queen Elizabeth II – Letting Agent Today

Propertymark calls on agents to give views on short-term lets – Property Industry Eye

Market share fall for hybrid agents most acute in London – The Negotiator

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