ScotGov rent freeze loophole blamed as private rents soar

The Scottish Government figures for the year to September, 2023 put the average rent for a two-bedroom in Scotland at £841 – up £105 compared with the previous year.

Average rents for a two-bedroom property in Scotland, the most common size of property in the private rented sector, rose by 14.1% but in Glasgow the rise is at 22.3%.

Details of the rent hikes have come despite the then First Minister Nicola Sturgeon announcing a rent freeze in September 2022 to beat the cost of living crisis.

It was replaced by a 3% rent cap for private tenancies only in April which was to remain in place till September 30 2023.

READ MORE: Scotland property: Buyers renting out rooms to make ends meet

A further six-month extension was agreed by ministers meaning landlords with properties within Scotland will continue to face restrictions to rent rises until March 2024.

The rent rise has been blamed on the terms of the rent freeze and cap because it does not apply to new tenancies.

It means that when a tenant leaves a rented property, a landlord can fix whatever price he or she likes.

The loophole has seen private landlords raise rents for new tenancies more than anywhere else in the UK.

Rental figures from Zoopla found new rents rose by 12.7% in the year to July, faster than the next hottest markets of London and the north-west of England.

The new Scottish Government figures are based predominantly on advertised rents, and so reflect prices that landlords are charging when their properties become available for rent.

Glasgow saw the highest rent increase of any area – both over the past year and past 13 years.

The average rent for a two-bedroom property in Glasgow soared by 22.3% in the year up to September.

The average rent for such a house now costs £1,050 a month – up from £858 in 2022 and £564 in 2010.

That represents a 86.2% rise in 13 years.

Lothian had the highest average monthly two-bed rent, at £1,192, while Dumfries and Galloway had the lowest (£487).

Housing campaigners said that the loophole needed to be closed, and condemned the inability to keep rents under control.

But tenants' rights’ minister Patrick Harvie said the Scottish Government will forge ahead with the introduction of long-term rent controls before the end of the current parliament and insisted the rent freeze and cap had provided tenants with "much needed stability".

The Scottish Tenants' Organisation (STO) said it showed that the rent cap is "not fit for purpose" and changes were needed.

Campaign group Living Rent said: "The Scottish government needs to bring in legislation that allows tenants to challenge their rent increases when the cap runs out in March, close the loophole that is allowing landlords to increase rents between tenancies and finally bring rents down."

After Glasgow, Lothian had the biggest annual rent rise at 18.4%.

That was followed by Argyll and Bute (18.2%), West Dunbartonshire (17.2%), Renfrewshire and Inverclyde (16.7%), East Dunbartonshire 15.0%), Dundee and Angus (15.0%), Scottish Borders (11.5%), North Lanarkshire (11.0%), the Ayrshires (10.7%) and South Lanarkshire (9.6%).

The lowest increases were in Dumfries and Galloway (1.5%), West Lothian (2.3%), Perth and Kinross (2.8%) and Highlands and Islands (3%).

Aditi Jehangir national secretary of Living Rent said: "Year after year, whilst the rest of us have been forced to tighten our belts, landlords have raked in huge profits, hiking up rents and forcing tenants out of the places they called home.

"The rent cap has been a huge relief for tenants already in homes in the private rented sector, however as the increases in new market rents demonstrate, landlords have exploited the rent cap's loophole and increased rents between tenancies. Unless the Scottish government acts now, thousands more tenants will be faced with astronomical increases when the cap runs out in March."

STO campaign co-ordinator Sean Clerkin added: "This loophole must be closed now with the rent cap of three percent attaching to the private rented property instead of the tenancy agreement. In this way private renters can be properly protected in this cost of living crisis against excessive profiteering landlords in Scotland. The Scottish Government has to take action now as it is currently failing to protect private renters across Scotland from bad landlords."

Mr Harvie said: “These statistics show how rents charged by private landlords in Scotland have been rising for more than a decade, and they are yet more evidence of the importance of action to make rents more affordable.

“There is no one solution to addressing rent affordability and our work to introduce long-term rent controls as part of the next Housing Bill is one measure being taken forward. This is alongside increasing the supply of affordable housing and our successful action to press the UK Government to increase Local Housing Allowance rates announced last week.

“Our temporary emergency legislation in response to the cost-of-living crisis has also provided tenants with much needed stability at a time when rents have been increasing across the UK. This includes a three per cent rent cap in most cases and a temporary pause on the enforcement of evictions.

"Only in Scotland have tenants had this protection during a tenancy. This rent cap applies only within existing tenancies, so is not reflected in these statistics which are based on newly advertised rents.”