An update to rent cap legislation
In this blog, our Policy Adviser Anna Gardiner shares her thoughts on the Scottish Government's draft of updated regulations announced this week.
The Scottish Government has this week laid before Parliament a draft set of updated regulations, together with a Statement of Reasons which they say sets out the evidence why it is “necessary and proportionate” to extend the measures beyond 30 September 2023, for a further six-month period, to 31 March 2024. The sunset provision provided in the Cost of Living (Tenant Protection) (Scotland) 2022 Act means that the measures cannot be extended beyond that date.
Needless to say, SLE is extremely disappointed by the blatant disregard the Minister, Patrick Harvie MSP, is taking to the wider impact of this legislation. The more obstacles the government puts in place for landlords to operate fairly, the fewer properties there will be to rent and that affects tenants more than anyone.
The government may be proud that they have successfully suppressed rents for many existing tenants in the short term. However, they should be ashamed that in doing so their act has overheated the market for new tenants, damaged supply, damaged investor confidence and caused landlords to delay maintenance and improvements - at the very time that energy efficiency improvements should be a priority for Mr Harvie (also Minister for Zero Carbon Buildings). What is stomach churning is that these were all reported by the government to be likely consequences of the legislation and yet the biggest victims are the very tenants they were supposedly trying to help.
The government also knew that, by suppressing rents on a temporary basis, there would be a risk that future rent increases could jump up to the open market level on expiry of the rent cap. In this statement they have reiterated their concern about unmanageable rent increases for tenants. The statement implies that the government is considering utilising the powers they have in the Act which allow them to modify the approach to adjudication of rent disputes so that outcomes given by the Tribunal are based on what is considered to be a reasonable rent increase rather than to the open market rent.
We will provide a further update when we know what form the scrutiny process for the updated regulations will take and when they are to be voted on in Parliament.
Our Press Release, made available shortly after the announcement, can be found here.
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