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Scotland announces rent freeze and eviction ban

Maxine McCreadie
Maxine McCreadie

8th September 2022

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Nicola Sturgeon has announced a rent freeze and eviction ban for tenants in Scotland as part of a package of emergency initiatives designed to combat the cost of living crisis.

It comes just months after SNP and Scottish Green ministers rejected a rent freeze following a campaign by Scottish Labour’s Mercedes Villalbla despite warnings that it would push millions more into poverty.

The announcement has received a positive response from tenants – who currently make up 38% of households in Scotland – with many hopeful it will put a stop to unfair rent increases and evictions.

However, whilst this might prevent landlords from hiking prices at a time when energy costs are at a record high, it could pose a risk to the country’s housing crisis which, as it stands, is reaching chronic levels.

In this blog, we’ll outline what the plans include and what it means for tenants, landlords and the social housing sector.

What do the plans include?

Nicola Sturgeon has vowed to take immediate action to protect renters ahead of further energy price hikes in a speech outlining her legislative programme for the upcoming parliamentary year.

She said: “I can announce that we will shortly introduce emergency legislation to parliament. The purpose of the emergency law will be two-fold. Firstly, it will aim to give people security about the roof over their heads this winter through a moratorium on evictions. Secondly, the legislation will include measures to deliver a rent freeze.”

The policy will be fast-tracked under emergency legislation and applied to both private and public sectors until “at least” March 31 next year as a temporary measure during the worst of the cost of living crisis.

Sturgeon also called for a freeze on rail fares – which were recently brought into public ownership – until March next year and made a plea to Prime Minister Liz Truss to freeze energy bills and organise an emergency summit in the coming months to discuss the ongoing cost of living crisis.

 

How will it impact renters?

The measures have been introduced to provide millions of tenants with some much-needed peace of mind whilst the the inflation rate reaches a 40-year high and the cost of living mounts.

For example, according to figures from the Office of National Statistics (ONS), average rental prices in Scotland are currently rising at their fastest rate on record with private rental prices in July 2022 3.7% higher than they were in July 2021.

The eviction ban will also prevent renters from being evicted during the ongoing cost of living crisis in a similar initiative to what was introduced just days into the COVID-19 pandemic.

However, with millions of students preparing to move ahead of the upcoming academic year and ministers refusing to confirm whether the rent freeze will include student accommodation, there is a risk that this will lead to a shortage of available accommodation for people that have yet to find a place to live.

How are landlords responding?

Since the news was announced, some landlords have pledged to remove their vacant properties from the market with others warning that the introduction of rent controls could mark the end of the private rental sector.

Chief Executive of the Scottish Association of Landlords (SAL), John Blackwood, said: “Since rumours of this announcement broke, I have been inundated by landlords saying they will be removing their vacant properties from the rental market, and I don’t blame them. Who on earth is going to let a property in the knowledge that they will be unable to meet their own financial and maintenance obligations if their tenants don’t pay the rent or their outgoings increase?”

This has also led to growing concern over the buy-to-let sector with some landlords worried that this could strip away the main incentive that encourages people to invest in buy-to-let properties in the first place.

 

How will it impact the housing crisis?

According to the Scottish Government, there are more than 26,000 households in the homelessness system and 600,000 social housing rental properties compared to 390,000 private rental properties.

This, coupled with the fact that Scotland currently has a shortage of around 100,000 homes, means that a rent freeze could stop the people that need housing the most from finding a suitable place to live.

Shelter Scotland Director, Alison Watson, emphasised that whilst the housing crisis existed before the cost of living crisis, it will make things much worse: “The temporary measures announced today will stop people losing their home but they do nothing for the record numbers trapped in the homelessness system right now,” she said.

The rent freeze is also set to be lifted on March 31 whilst annual rent increases for rental properties owned by housing associations or local councils is expected to come into force on April 1, doing nothing to protect the majority of the country’s tenants from rising costs.

Chief Executive of the Scottish Federation of Housing Associations, Sally Thomas, believes the move will lead to poorer quality housing: “If a rent freeze continues without increased government support, we risk housing associations being unable to build the new social homes that Scotland desperately needs, and it is more than likely we won’t achieve the target of 110,000 new affordable homes by 2032.”

Maxine McCreadie
Maxine McCreadie

Maxine is an experienced writer, specialising in personal insolvency. With a wealth of experience in the finance industry, she has written extensively on the subject of Individual Voluntary Arrangements, Protected Trust Deed's, and various other debt solutions.

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Current Version

September 8 2022

Written by
Maxine McCreadie

Edited by
Ben McCormack

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