Scottish government sets out rental reform plans

The Scottish government’s radical plan for the private rented sector has sent shockwaves through the industry.

After months of public consultation, the Housing (Scotland) Bill will reshape landlord-tenant relationships, with major changes to rent increases, evictions, tenant rights and more.

Rent controls – tougher, but more local

Unlike the previous system of national rent controls which expired last month, rent increase caps will now be set locally. According to the government’s policy memorandum, the idea is to “stabilise rents in areas where market rents have been increasing particularly steeply, whilst ensuring… a balanced approach that provides appropriate protection for the property rights of landlords”.

Local authorities will need to assess their local rental markets (and may be given the right to get rental data from local landlords to do so). They will then be asked to recommend to Scottish Ministers whether to impose rent control areas.

But in another shift away from the previous system, rent increase caps will apply both within and between tenancies, meaning landlords will not be able to reset below-market rents to the market rate when tenants leave. Ministers will also be able to say when landlords can set rent increases above the cap.

There’s no word yet on what the cap will be, or what formula will be used to set it. In the meantime, many landlords are imposing extra-large rent increases, fearing they won’t be able to later. The Scottish government previously proposed a rent tapering formula to prevent this once the previous rent control system expired, but didn’t pass it into law – meaning rent increases will now be uncapped until new legislation is passed. Currently, politicians aim to pass the bill by the end of 2025.

Tenancy rules overhauled

Along with bringing back rent controls, the bill will make other big changes – but falls short of previous eviction protections that ended in March 2024.

• First-tier tribunals and sheriff courts will have to “reduce, as far as possible, the negative impact of eviction” on tenants when setting eviction timetables. Evictions can be delayed because of a tenant’s financial hardship, ill health, or even “seasonal factors” like school exam periods or religious holidays. However, unlike in England , the government has not proposed any changes to existing eviction grounds or notice periods.
• Landlords will face tougher penalties if they evict tenants illegally. Tribunals and Sheriff Courts will be able to order damages of between 3 and 36 times the monthly rent. Tribunals and Courts will also have to inform local authorities, police and the Scottish Housing Regulator of any cases awarding damages, paving the way for further sanctions.
• Tenants will be given the right to request to keep a pet or (after six months) redecorate, which landlords cannot unreasonably refuse. Tenants will be able to make some minor changes, like hanging pictures, without the landlord’s consent.

Other national headlines

Scottish Government housing bill ‘huge step forward’ for tenants, say campaigners – The Herald

Rise in Welsh homebuyer demand as housing market improves – South Wales Argus

Calls for urgent change as short-term lets regulations hit Edinburgh Festivals – Scottish Housing News