Recent data exposes a concerning trend in Scotland, where private landlords have leveraged a loophole in temporary rent controls to impose substantial rent hikes for new tenancies, that exceed those in other parts of the UK.
The Scottish government took steps to address the housing crisis by introducing temporary rent caps this spring, typically limiting annual rent hikes to 3%. However, landlords retain the option to exceed this threshold when formulating new tenancy agreements.
According to rental data from Zoopla, a property website, it appears that Scottish landlords have utilized this clause to optimize rents for new tenancies, experiencing a 12.7% increase in the year leading up to July. This growth outpaced even the thriving markets of London and the north-west of England.
The cities of Edinburgh and Glasgow experienced the highest yearly upticks in asking rents compared to any other UK city, with growth rates of 15.5% and 13.7%.
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Rent controls in Scotland have effectively curbed housing cost increases for renters who are not initiating new tenancies, consistently keeping them below the rate of inflation. Recently, the Scottish government announced its intention to adopt long-term rent controls after a successful trial.
According to Living Rent, a tenants’ union active in Scotland, the cap has offered much-needed protections.
On the flip side, reports have emerged of landlords telling tenants that they will either sell the property or move in themselves unless tenants agree to a rent increase, effectively coercing residents into accepting a rent hike greater than 3%.
‘For those who have had to end a joint tenancy due to a flatmate moving out or for those who have needed to relocate, it’s been the wild west of open market rent,’ said Aditi Jehangir, the secretary of Living Rent.
‘The average tenant already spends at least a third of their income on rent. Tenants should not be forced to choose between remaining in the communities they love or being able to afford to live.’
In response to calls from campaigners for rent controls in different UK areas, Scotland has implemented its own strategy. Acorn, the community union known for its tenant advocacy, is pushing for rents to be fixed at 30% of the median local income.