Wednesday, 31 May 2023
The most significant legislation to impact our industry last year and going forwards is “The cost of living Act 2022” and below I give a brief outline of how this will affect your properties. Please get in touch to discuss further as this legislation only applies to PRT (private residential tenancy) contracts and older SAT (short assured tenancies) can have a greater flexibility on rent increases if they meet certain criteria.
Cost of Living (Tenant Protection) (Scotland) Act 2022
The Act came into force on 28 October 2022 and will be in force until at least 30 September 2023. With the agreement of parliament the legislation can be extended beyond this date to 31 March 2024.
The Act introduces restrictions on rent increases and evictions during the time it is in force.
For rent increase notices issued from 1 April 2023 the permitted rate is set at 3%. For tenants on a PRT the notice period is 3 months so the increase can’t come into force until July 2023 at the earliest. Any rent increase notices issued prior to 1 April 2023 are capped at 0% and therefore voided by the current legislation, even if they come into force after 1 April 2023.
Evictions are still permissible under certain circumstances and rent increases have been limited to 3% this year. We are advising all of our clients to increase their rents this year (using the prescribed information) and thereafter to remain within touching distance of market prices. In general the market place remains brisk and there are more applicants (often distressed at the lack of properties available) than property to service the demand. As a result we have seen rent increases on new instructions due to market forces.