Over the last few days and weeks you may have read and heard a lot about the Scottish rental market and much discussion about changes to the temporary cap on rent increases.
To help you gain an overview, here’s a quick summary of recent updates within the Scottish rental market.
Rent Cap
On the 6th September 2022, the Scottish government introduced several measures to assist tenants with the cost of living, including a temporary cap on rent increased until the 31st March 2023. This means that, as a landlord, you can only increase the rent by applying to the First Tier Tribunal when you’ve experienced an increase in certain costs, e.g. interest paid on mortgages, insurance premiums or any services related to your rental property.
Although this alleviated cost pressures for tenants, it did not take many of the landlords’ needs into account. The Scottish government has now introduced a change to this legislation giving private landlords some breathing room and allowing them to increase rent by 3% with the ability to apply for an increase of 6% from April 1st.**
The 6% is only eligible to landlords who must prove to First Tier Tribunal that they are at a financial loss as a result of rent cap. Currently, there are no guidelines on how long this process would take.
Evictions
As well as the rent freeze, the Scottish government also introduced rules to help protect tenants in the private and social rented sector from eviction, including temporary amendments to the Housing (Scotland) Act 1988 for unlawful evictions.
Although these changes don’t prevent you, as a landlord, to order an eviction, it does delay the entire process for up to six months, thereby offering tenants more time to find alternative accommodation.
Energy Efficiency Regulations
Currently, all properties within the private rented sector require an EPC rating of D, however, as of 2025, the new regulations stipulate that any change of tenancy will require your properties to have a minimum rating of C***. Exemptions apply for properties where it’s not technically feasible or not cost-effective.
Other changes to remember:
- Banning pets from rental properties is not automatic anymore. As a landlord, you now have 28 days to object to a written pet request.
- As of February, 1st 2022, all fire alarms in a property need to be interlinked^.
Demand and Supply
Due to increasing costs and the balance of supply and demand being slightly out of kilter, the UK continues to see an increase in rental growth. Especially as potential first-time buyers are renting for longer due to the changes in available mortgage deals, and more renters are looking to downsize to save energy, the rental demand has increased by 46% (comparing November 2022 to the 5-year average). Edinburgh and Glasgow have experienced a growth rate of 12.4% and 14.1% respectively at the end of 2022^.
If you are a landlord looking to improve your rental yield, or you would like to find out more about your property’s rental value:
