In Legislation, Long maligned by landlords, The Scottish Government has confirmed that rent caps and restrictions on rent increases will be finally withdrawn from April 1, 2025.
This move scraps the temporary measures put in place by the SNP in 2022 to try to prevent mid tenancy rent rises. Set against a backdrop of rising interest rates, and UK tax legislation for 2nd property owners, the restrictions made generating profit increasingly hard for landlords. The Goverments decision to scrap these caps enables rents on existing tenancies to return to market rates for the first time in more than two years.
Landlords will still be restricted to one rent increase per tenancy every 12 months. Moreover, the lifting of rent restrictions is less significant for tenancies under 12 months old, as the rent caps only applied to existing tenancies. Properties advertised for new tenants were not restricted and could be set at market rent levels during the rent cap period.
Although this upcoming change gives landlords greater control over rental income, it is likely not the end of rent regulations, as The Scottish Government is still moving forward with a Housing Bill designed to establish permanent rent regulations. Although specifics are still under discussion, it is improbable that any new rent controls will be implemented before 2027.
This implies that landlords have a minimum of two years to function in a less regulated rental market, though additional interventions seem probable. The exact nature of these interventions remains uncertain.
At Property Bee our strategy since 2022 has been to aim for the highest possible rent from the outset, by maximising the rental potential of our new properties, to allow for a more limited rent increase path durning tenancies in the event of further Goverment intervention. Working alongside Umega Lettings, we are consistent in achieving top of market rents in the properties that we take to market.
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