In a surprising but welcome move, the Scottish Government has confirmed that temporary rent caps and restrictions on rent increases will be withdrawn from April 1, 2025. This marks a major shift for landlords, allowing rents on sitting tenancies to return to market levels for the first time in over two years.

Landlords will still be limited to one rent increase per tenancy every 12 months. Additionally, the removal of rent restrictions is less relevant for tenancies less than 12 months old because the rent caps only ever applied to existing tenancies. Properties being advertised for new tenants were not restricted and could be set at market rent levels throughout the rent cap period.

While the upcoming change gives landlords more control over rental income, it’s probably not the end of rent regulations as the government still plans to introduce permanent rent controls in some form or another by 2027.

 

WHAT’S CHANGING FROM APRIL 2025?

Since 2022, landlords have faced strict rent restrictions, with sitting tenants able to challenge mid-tenancy rent increases that they felt were too steep, through a rent officer or tribunal where a tapering formula was applied to limit increases in some cases.

From April 1, 2025:

 ✅ Landlords regain full control over setting mid-tenancy rent increases.

 ✅ Tenant appeals will revert to market rent assessments – meaning if a tenant challenges an increase, the rent officer or tribunal will set the rent at market value, even if it’s higher than the landlord’s proposal.

The 12-month rule still applies where landlords can only increase rent once per year for sitting tenants, so it’s important to time rent reviews carefully.

 

NEW TENANCIES WERE NEVER AFFECTED BY RENT CAPS

It’s also worth clarifying that throughout the rent cap period, landlords were always free to set market rents for new tenancies. If a property was advertised on the open market, landlords and tenants could agree on a rent level without any restrictions. The cap only applied to existing tenants staying in place.

Now, with the rent cap lifting, landlords can review rents for existing tenancies and bring them in line with open market rent-levels.

 

WHAT THIS MEANS FOR LANDLORDS

For many landlords, this is an opportunity to bring rents back in line with market levels after years of stagnation. However, with the government still pushing for permanent rent controls in the future, it’s important to take a long-term strategic approach to rent increases.

 

HOW TO APPROACH RENT ADJUSTMENTS IN 2025

🏠 Review your portfolio – If rents are below market levels, now is the time to reassess and plan for adjustments.

 📊 Compare against current market rates – Consider location, property condition, and demand to ensure competitiveness.

 📢 Communicate with tenants – Fair and reasonable rent increases help retain good tenants and reduce void periods.

 📅 Plan for the future – Rent controls could return in 2027, so factor in potential restrictions when setting new rents.

While the imminent removal of rent caps is good news, long-term legislative changes are still coming, and landlords should prepare for a regulated environment in the future.

 

WHAT ABOUT PERMANENT RENT CONTROLS?

The Scottish Government is progressing with a Housing Bill aimed at introducing permanent rent regulations. While details are still being debated, it is unlikely that any new rent controls will take effect before 2027.

This means landlords have at least two years to operate in a freer rental market, but further interventions look likely. In what form is anybody’s guess.

 

WHAT SHOULD LANDLORDS DO NOW?

  • Start planning rent increases for 2025 – With rent caps lifting, landlords should review their rental income strategy to ensure their properties remain viable.
  • Stay informed – Keep up to date with developments in the Housing Bill to understand how future rent controls might impact your portfolio.
  • Work with a professional letting agent – At Umega, we provide expert advice on rent pricing, market trends, and compliance, ensuring landlords navigate these changes confidently.

 


HOW UMEGA CAN HELP

At Umega, we believe in sustainable, long-term rental strategies that work for landlords and tenants alike. Whether you need help adjusting rents, reviewing your portfolio, or navigating future rent controls, our team is here to support you.

📩 Get in touch today to discuss your rental strategy and ensure you’re prepared for the changes ahead.