Mortgages.scot

Following new legislation as a result of the cost of living crisis new legislation is now in place having been given royal assent. This is an unusual step by the Scottish Government that impacts many.

Cost of living

The cost of living (Tenant Protection) Act gives the Scottish Government the power to freeze rent for a number of tenants which includes:

• Private tenants
• Social tenants
• Student accommodation tenants

From September 6th 2022 through to 31st March 2023 landlords are unable to increase rent. The Scottish Government also have the option to extend this for a further two six-month periods. Whether they do or not depends entirely on how the cost of living crisis plays out over the next few months.

Evictions

The new legislation extends to evictions during the same period. There are some exceptions, however, for the most part, all evictions are on hold.

What about landlords?

Landlords are not immune to the cost of living crisis. They have costs that in many cases can only be met by receiving rent! Landlords are suffering from increased mortgage rates and many other costs.

The new legislation does provide some support for landlords. There are some safeguards for landlords that may be struggling to cope. Where a landlord can prove their costs have risen significantly then rent can be increased. The main caveat appears to be that the increase in rent must be less than 50% of the increased costs.

Protecting tenants but beware!

I am not going to get on my soapbox here, well maybe one foot up. I completely understand the need to protect tenants. These are difficult times but everyone is impacted. Social landlords and student accommodation for the most part are better placed than private landlords to deal with this.

Private landlords provide a lot of property. They are not charities and I get that many, tenants in particular will have little sympathy for their landlords but beware of the consequences.

If private landlords can't cover their costs and are unable to increase rent or remove tenants from the property then there is little if any benefit to letting it. I see many private landlords already leaving the property empty or simply putting it up for sale. Some are even insisting on rent paid up front for the full term of the tenancy.

What will end up happening is fewer properties available for rent. Tolerate or loathe private landlords, we need them. Tenants need them. There is only so much they will take.