Nicola Sturgeon’s rent cap backfires as Scotland suffers steepest rises
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Rents are surging in Scotland but slowing almost everywhere else in the UK thanks to Nicola Sturgeon’s rent cap and eviction ban, data has revealed.
Scottish tenants have been hit with the highest annual rent growth of any UK nation at 11.6pc as Edinburgh and Glasgow witness steeper price increases than London.
It comes as landlords across the UK hand tenants smaller rent rises, which are at a two-year low of 7.8pc, down from 11pc a year ago, according to property website Zoopla.
Holyrood’s decision in September 2022 to freeze rent payments for hundreds of thousands of Scots and ban most evictions came in response to the cost of living crisis, which Ms Sturgeon labelled a “humanitarian emergency” at the time.
However, the move has since backfired. The latest double-digit rent growth in Scotland comes on top of a 12.7pc in the nine months to September last year, compared with 10.5pc nationally, according to Zoopla’s figures.
Richard Donnell, executive director of Zoopla, said that landlords and agents north of the border have been incentivised to “push rents as much as they can” thanks to the SNP’s regulations.
He said: “Landlords operating in Scotland have got this challenge that when a property becomes vacant the landlord thinks ‘obviously I must get as much rent as I can because the amount I can increase is limited during the tenancy.”
“Landlords and agents in Scotland are trying to push rents as much as they can [but] this can only go so far.
“Rents in Scotland are more affordable than many parts of the UK so there’s headroom for rents to rise before you use up the buying power of renters. Rents can only really rise if renters are able to pay the higher rents,” he added.
The rules, which were imposed by Ms Sturgeon when she was first minister, initially froze rents but in January last year capped increases at 3pc. Landlords cannot increase the rent they charge tenants during a tenancy and can only do so when taking on a new tenant.
They have also been forbidden from evicting tenants for well over a year, however, the ban on evictions is expected to lapse at the end of March.
The surging cost of renting in Scotland contrasts with London, which has historically been at the sharp end of national increases to rent.
In the capital, price growth has slowed rapidly over the last year with rents up by just 5.1pc, down from 15.3pc a year ago, Zoopla’s research showed.
Rents in London were still the most expensive covered by Zoopla’s data, at £2,121 on average per month, followed by Bristol at £1,389. The average British household now pays £1,223 per month.
The average rent in Glasgow is now £951 per month, while tenants in Edinburgh pay on average £1,263.
Both are among the few cities in the country where prices continue to rise by double digits, at 10.9pc and 11.5pc respectively.
Tenants’ Rights Minister Patrick Harvie said: “Our emergency legislation has led the way at a time when rents have been rising across the UK, stabilising rents to help tenants to stay in their homes.
“Since 1 April 2023, private landlords with a tenancy subject to the cap have been able to increase a tenant’s rent in-tenancy by up to 3pc or can apply to Rent Service Scotland for approval of an increase of up to 6pc in specific circumstances.
“Rental market challenges are being felt across the UK, with interest rates and tax increasing pressure on tenants and landlords, but it is only tenants in Scotland who have been protected from in-tenancy increases to their rent. Elsewhere private tenants have faced rises both within and between tenancies.
“We will introduce a Housing Bill to deliver a New Deal for Tenants, including the introduction of long-term rent controls for the private rented sector.”
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