At the beginning of June, the Scottish Government announced that it was extending the Cost of Living (Tenant Protection) (Scotland) Act Regulations beyond 30 September 2023 for an additional six months. This came as a surprise to nobody in the letting industry as the writing has been on the wall that this would happen since the emergency legislation was introduced last year with the predictable option for it to be extended until March 2024.

The extension to the legislation means that the following conditions will continue until March next year:

  • Mid-tenancy rent increases will continue to be capped at 3%, unless property owners can demonstrate that their own increased costs justify an increase as much as 6%.
  • Enforcement of evictions will continue to be paused for six months for most tenants, except in a number of specified circumstances such as excessive rent arrears.

Letting agents and landlords who have been operating in the Scottish private rented sector (PRS) over the last year will be well aware of the temporary measures in place and while the news of the extension is frustrating, we were all expecting it. 


Ongoing consequences of the legislation

Rising interest rates and clumsy legislation introduced without proper consultation is reducing the overall investment in, and consequently the number of new rental properties coming into, the Scottish PRS. This is exacerbating the gap between the number of rental properties available for let and the number of prospective tenants looking for a new home, which is resulting in thousands of tenants being effectively locked out of the PRS as there’s just not enough properties for people to rent. 

There is a gulf growing between existing tenancies that are capped at 3% annual rent increases and properties on the open market where rents are rising at 10%-12% which is going to create more tension and greater disparity in the sector further down the road.

All of this creates a significant problem for policy makers who want to continue to reduce rental costs for tenants but risk leaving thousands of tenants with nowhere to live as a result.


What will happen after March 2024?


At this stage, nobody knows.

The Scottish Government is still outwardly maintaining that they will take more actions to reduce costs for tenants at landlords’ expense, but they must be realising the damage to the sector and the tenant experience that lack of supply will have. The Scottish Government has, up to this year, taken landlord investment in the Scottish PRS for granted. The evidence is building that shows their policy making is reducing supply into the market making conditions overall worse, not better. Where they go from here is anybody’s guess.