Scotland’s first minister Nicola Sturgeon has announced a rent freeze for tenants in the social and private rented sectors across Scotland, as well as a moratorium on evictions, in an attempt to address the cost of living crisis.
In a speech delivered yesterday (6th September), Sturgeon revealed that the temporary measures — subject to parliamentary approval — will be effective immediately and will remain in place until at least the end of March 2023.
In addition, the first minister confirmed the extension of eligibility for the Tenant Grant Fund to provide help for tenants struggling to pay rent as a result of wider cost of living increases.
She also announced plans for a new Housing Bill to strengthen tenants’ rights and implement key policies on short-term lets and the prevention of homelessness, as well as a Bankruptcy and Diligence Bill to help those struggling with debt.
“We do not control mortgage or general borrowing rates, but we will continue discussions to encourage banks and other financial services firms to take an approach that maximises security for homeowners and businesses,” added Sturgeon.
In her speech, the first minister also expressed her frustration at the lack of power given to the Scottish parliament to address the cost crisis, which she referred to as “a humanitarian emergency”.
“Regrettably, the powers to act in the manner and on the scale needed do not lie with this parliament.
“Frankly, they should — if they did, we could have acted already, but they don’t. These powers are reserved, for now, to Westminster.”
Commenting on the news, Timothy Douglas, head of policy and campaigns at Propertymark, said: “It is not only tenants who are exposed to the effect of the cost of living pressures and, as key housing providers, private landlords will be asking what help they can expect to manage any additional costs they may have to bear as a result of this announcement.
“Furthermore, it’s unfair to suggest letting agents and their landlords will be routinely increasing rents at a time when many tenants are facing a further strain on their finances.
“We know the Scottish government is committed to a system of rent controls and is already considering a ban on winter evictions.
“What’s most alarming is that this feels like déjà vu with the potential for these new temporary protections to become permanent, as has been the case with others introduced during the pandemic.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, stated: “Although it is important to support tenants at this time of soaring energy bills and rents, a rent freeze — unless very short-term — is likely to cause more harm than good and cannot make up for failure to provide more affordable homes.
“Landlords have investment choices too; dealing with the effect, not the cause, of this problem will probably only result in more landlords leaving the sector, so rents will rise even higher and standards are likely to drop further."
Scott Marshall, managing director at Roma Finance, said: "This announcement will be a blow for landlords, many of whom are small-owner-managed businesses facing increased mortgage costs as a result of the Bank of England’s decision to raise base rates almost every month this year.
"The cost of living crisis is worsening but, if cost caps are to be introduced, they should be put in place to support everyone, rather than penalising individual groups.
"There may now be a mass exodus of landlords and increased repossessions following this announcement, which could further exacerbate the problem.”
