With the Cost-of-Living Tenant Protection Act ending on March 31st, it is important that tenants and landlords alike familiarise themselves with the implications the rent cap ending will have. Let’s take a look at the changes that are set to be made and how they will affect tenants and landlords.

What will change?

The Cost of Living (Tenant Protection) Act 2022 had imposed a temporary rent cap and an eviction prohibition. These provisions were set to expire on March 31, 2023, but Scottish ministers opted to extend the legislation until September 30, 2023, and then again until March 31, 2024.*

The legislation stipulates that the act cannot be extended beyond this date. Private rents are limited to 3% up until that point, and all appropriate Rent Increase Notices issued on or before March 31st are covered by this protection.* The additional eviction protections will also expire on this date.

Subject to parliamentary approval, the rent adjudication process will be temporarily amended for a year, starting on April 1. Any tenant who wants to contest a notice of a rent increase can apply for rent adjudication after this date. In these circumstances, the First-tier Tribunal or Rent Service Scotland will determine rent using the lowest of the following three figures:

• The open market rate
• The landlord’s requested rent
• A comparator based on the difference between the market rent and the current rent

Implications for tenants

For tenants, the end of the Cost-of-Living Tenant Protection Act implies a potential increase in rental prices. The act’s provisions limiting annual rent increases will no longer apply to landlords. Because of this, tenants may experience changes in their monthly rental expenses, especially in areas with high demand and limited housing availability.

How can tenants prepare for the act’s expiration?

Here is what you can do as a tenant to prepare for the expiration of the act:

• Review your lease agreement – Carefully go through your lease agreement to understand the terms and conditions regarding rent increases. Some agreements may already have clauses addressing rent adjustments after the act’s expiration.
• Communicate with your agent – Get in touch with your estate agent to discuss any concerns or questions you may have about potential rent increases. If you wish to dispute an increase of rent, your agent can help you through the process.
• Create a budget – Assess your financial situation and create a budget that accommodates potential rent increases. This will help you make informed financial decisions moving forward.

Implications for landlords

The expiration of the Cost-of-Living Tenant Protection Act also has implications for landlords. Without the constraints imposed by the act, landlords have greater flexibility in setting rental prices. This may be advantageous for property owners, particularly in areas where rental demand is high, as they can align their prices with market conditions. They do, however, need to bear in mind the potential for tenants to dispute the rent increases.

What factors should landlords consider?

Here are the factors that you should consider as a landlord when the act expires:

• Market demand – Analyse the demand for rental properties in your area to gauge the potential for higher rental prices. Understanding local market conditions enables landlords to make informed decisions regarding pricing.
• Competitor analysis – Research the rental prices set by other landlords in your area. This will help you determine a competitive rate that attracts tenants and maximises your rental income.
• Tenant retention – Consider the impact of rental price increases on existing tenants. While higher prices may be tempting, losing reliable and responsible tenants can result in increased vacancies and potential financial losses.
• Use an experienced agent – An esteemed estate agent will help you take into consideration all of the above-mentioned factors to ensure you make informed decisions.

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