Emergency rent controls introduced during the cost-of-living crisis have mostly ended, but new long-term measures are in the works. The temporary rent cap (via the Cost of Living (Tenant Protection) (Scotland) Act 2022) limited increases to 3% (or 6% in special cases) and froze evictions. Those rules expired on 31 March 2024. Since April 2025, Scotland has reverted to the standard Private Residential Tenancy (PRT) framework: landlords may raise rent once every 12 months (with 3 months’ notice), and tenants can challenge hikes through Rent Service Scotland (RSS).

However, the new Housing (Scotland) Bill proposes a refreshed rent control system to balance tenant protection with landlord interests.

Legacy of Emergency Measures

  • 2022 Act caps expired: The 2022 Act (Tenant Protection) initially froze rent increases at 0%, later 3% (with up to 6% in exceptional cases). This law ended 31 March 2024.
  • Transitional adjudication: For one year (Apr 2024-Mar 2025), a modified adjudication process limited increases by referencing the lower of market rent, requested rent, or a capped rise. That temporary regime ended on 31 March 2025.
  • Return to PRT rules: From 1 April 2025, normal rules apply. A landlord can increase rent once per year (after three months’ notice) and tenants can appeal if they believe an increase is unreasonable. If appealed, an RSS Rent Officer will set an “open market rent” for that property.
  • Rent Pressure Zones (legacy): Local councils still could ask the government to declare a Rent Pressure Zone (RPZ), which caps annual increases at CPI + 1%. In practice, no Scottish council has used this power so far.

Proposed Long-Term Controls

The Housing Bill would introduce Rent Control Areas (RCAs), replacing the old RPZ mechanism. Key proposals include:

  • Local designation: Councils will gather rental market data and may propose an RCA to Ministers if rents are considered unbalanced. Any approved RCA would then have binding caps on rent increases.
  • Capped increases: In an RCA, rents could only rise at CPI + 1% per year, capped at a maximum of 6%. Importantly, this cap would apply both during and between tenancies in those areas. For example, even when a tenant moves out, the rent for the next tenancy would still be subject to the limit.
  • Balancing costs: The Scottish Government argues that a CPI+1 cap still lets landlords keep up with inflation and rising costs (as amended into the Bill). Indeed, tenant groups worry about rising rents, while landlord groups insist on covering costs. The agreed compromise is CPI+1% (max 6%) in RCAs.
  • Exemptions: Spring 2025 consultations will consider scenarios where higher increases might be justified (e.g. after major property upgrades). Landlords should watch for guidance on when and how above-cap increases or exclusions might apply.

Implications for Landlords

  • Geographic variation: Only in designated RCAs will caps apply. Outside these areas, rent rises remain market driven. This means landlords in non-RCA regions currently have no new limits beyond the normal PRT rules.
  • Portfolio planning: In an RCA, landlords should expect slower rent growth. Budget forecasts must account for the CPI+1 restriction. However, CPI+1 can still allow modest increases to cover maintenance and inflation.
  • Data reporting: Future RCA designation will rely on accurate rent data. Landlords may need to report rent/property info to local authorities. Keep detailed records of existing rents and any increases.
  • Timeline: RCAs are not immediate. Analysts (like the Scottish Association of Landlords) suggest the earliest implementation could be around 2027–2028. The Bill was passed through stage 1 in 2024 but requires further legislative steps and regulations.
  • No change to new-tenancy rents: Even in RCAs, the cap applies across tenancies, but Scottish Ministers may allow exemptions when a property is empty to incentivize improvements. Details will come later.

In summary, rent control in Scotland is shifting from a blunt emergency cap to a more targeted inflation-linked system in certain areas. Landlords should prepare for those eventual RCAs by monitoring local market assessments and adjusting rent-increase strategies accordingly.

John Shand
Property Manager

The information and opinions contained in this blog are for information only. They are not intended to constitute advice and should not be relied upon or considered as a replacement for advice. Before acting on any of the information contained in this blog, please seek specific advice from Gilson Gray.