The Cost of Living (Tenant Protection)(Scotland) Act 2022 (the Act) came into force on 28th October 2022 and introduced what was described by the Scottish Government as “emergency measures” to respond to the cost of living crisis. With the Act we got the rent cap (originally a rent freeze) and the eviction moratorium which operates to delay the enforcement of some eviction or possession grounds. Built into the Act are provisions to allow it to be continued in six monthly bocks if the Scottish Government deemed it was necessary. In January 2023, the Scottish Government announced that the provisions would be continued, with some changes, after the expiry of the first six month period through to 30th September 2023 (although the rent cap was lifted for social landlords). Since 1st April 2023 private landlords have been able to seek in-tenancy rent increases of up to 3%, as well as apply to a rent officer for an above rent cap increase of up to 50% of certain prescribed property costs (capped at a maximum of 6% rent).
Scottish Government announcement
Whilst we still await the second report on the Act, on 1st June 2023, the Scottish Government announced their intentions in relation to these “emergency” provisions. The announcement can be found here.
Those in the sector who had hoped for an end to the rent cap and/or eviction moratorium are going to be disappointed. The Scottish Government announced that:
- The current rent cap of 3% for in-tenancy rent increases will continue;
- The ability to apply for above rent cap increases for up to 50% of increases in prescribed property costs (capped at 6%) is also to be continued;
- The current eviction moratorium will also remain in place; and
- The changes to the way damages for unlawful eviction are calculated is to continue too.
In short, for the period 1st October 2023 to 31st March 2024, nothing will change. For those interested, the Regulations to extend the Act can be found here.
Why is the Cost of Living (Tenant Protection)(Scotland) Act 2022 being continued?
Without sight of the second report, it is difficult to assess any purported justification for why the Act is being continued or even why there is to be no change to the current 3% cap when, by all indications, landlord’s costs are continuing to rise at substantially higher rates. No new empirical evidence has been cited or produced, and all we can see from the announcement is the Scottish Government’s assertion that “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.”
What will happen in April 2024?
As mentioned already, the Act only provides for one more continuation through to 31st March 2024 and it is noted that the announcement by the minister responsible says: “We are also looking at how to transition out of the emergency measures…”. That may be a comfort to some, even though the sector is facing another six months of the rent cap and eviction moratorium as it suggests there is an end in sight. However, you do not have to cast your mind back very far and look at the Scottish Government’s approach to the pandemic and their continuation of emergency legislation beyond the initial 18 months provided for in that legislation, for reasons that are hard to decipher even with the benefit of hindsight. Indeed, the announcement contains some wording that will raise some anxiety for the private sector as a whole. Tagged on to the end of the last quote mentioned above is “…and we continue to listen to and work hard with stakeholders to develop and deliver rental sector reform.” We know that the Scottish Government is working on a new Housing Bill, and we know that the Scottish Government is committed to a national system of rent controls by the end of 2025 as part of that. It is also understood from various stakeholders working with the Scottish Government that there is already talk that the anticipated Housing Bill is being delayed, so one concern is that Scottish Government may consider using the Act to “plug the gap” and extend the provisions beyond even 31st March 2024. There is of course a potential “spanner in the works” for the Scottish Government here as the decision in the judicial review into the Act is awaited and could be delivered within the next few weeks. Whilst the outcome of that case is not known at the point of writing this blog, if successful, it would certainly make for an interesting few months.
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