New analysis has found that temporary restrictions on rent increases in the Scottish private rented sector led to a more than eightfold increase in renters challenging rent hikes from their landlord.
In April 2024, the Scottish Government brought in restrictions, which capped the amount landlords could hike the rent on their tenants to a maximum of 12%, and tapered based on the size of the increase, to support the transition away from the short-term rent cap that was in place under the Cost of Living Act.
But these temporary restrictions on rent increases in the private rented sector ended yesterday (31/03), with Rent Service Scotland now using open market rents to determine rent tribunal cases.
Analysis by the campaign group Generation Rent has found that 899 applications have been made since the temporary restrictions were introduced in April 2024, with 290 households (32%) seeing their rent rise limited to the maximum of 12%. This was a huge increase in caseload, with just 106 cases in the 12 months to September 2022, the last time open market rents were used as the baseline by Rent Service Scotland.
Edinburgh North and Leith was the Westminster constituency with the most cases (108), followed by Edinburgh South West (78) and Edinburgh South (75). Outside Edinburgh, Glasgow South saw the most cases (53).
Of seats that had 10 or more cases, Glasgow North East saw the largest proportion capped at 12% (54%), followed by Aberdeen South (53%) and Motherwell, Wishaw and Carluke (50%).
Removal of ‘lifeline’ leaves private renters vulnerable
The Scottish Government is currently legislating to bring in a permanent rent cap through the Scottish Housing Bill. However, the cap, which will give local authorities the power to cap rent increases to CPI +1% at a maximum of 6%, will not come into force until sometime in 2027.
Despite significant concerns from tenant groups, including Generation Rent, that private landlords will seek to significantly hike rents in the intervening time until the permanent cap becomes law, the Scottish Government has ruled out extending the temporary restrictions.
The removal of the temporary restrictions means that Rent Service Scotland will use the local open market rent as the benchmark for determinations so rent increases could be even higher than the landlord asked for.
The Scottish Government has launched a campaign to make renters aware of their rights in challenging rent increases. But Generation Rent is concerned that the fear of having to pay an even higher rent increase than the landlord has proposed may discourage many renters in Scotland from doing so.
Therefore, it has launched a new resource which maps adjudication cases to help renters understand what rent levels Rent Service Scotland is likely to determine for their home, and whether challenging their landlord’s proposed rent is worthwhile. The nearly 900 cases since May 2024 have been mapped and colour-coded based on the number of bedrooms.
Private rental prices in Scotland in 2024 rose by nearly 7%, the highest annual rate since the Scotland data series began in January 2012, meaning many tenants are already having to pay unaffordable shares of their income on rents. For example, average rents in Edinburgh have doubled since 2010, with renters on average spending 43% of their income on rent in the city. Meanwhile, analysis by the Joseph Rowntree Foundation found 1 in 4 Scottish private renters live in unaffordable housing, with nearly a quarter of children in poverty living in private rented accommodation.
Dan Wilson Craw, Deputy Chief Executive at Generation Rent, said:
“Everyone needs a safe, affordable home. We know high rents are already pulling many renters in Scotland and their families into poverty. The protections over the past few years have been a lifeline and their removal leaves renters up and down the country vulnerable to unaffordable rent hikes that could force them out of their homes. We’re very concerned that landlords in Scotland will use the next two years to significantly hike the rent on their tenants before the proposed longer term rent cap becomes law.
“Renters should be able to challenge a rent increase with the knowledge that they at least can’t make their situation worse. Our new resource gives people the tools to review recent decisions of Rent Service Scotland near them and make a more educated decision on the best approach to take.”
