SFHA responds to Scottish Government Rent Adjudication Proposal

SFHA commissioned Gillian Campbell Consulting to respond to the Scottish Government consultation on ‘Supporting a Transition Away from the Emergency Measures’ of the Cost of Living (Tenant Protection) Scotland Act.  

The emergency rent cap implemented under the Cost of Living Act in 2022 will expire March 31st 2024. In response, Scottish Government is proposing a adjudication approach to address concerns that the expiry of the rent cap may lead to significant and unmanageable rent increases for private sector tenants, if rents moved immediately back to open market rent.  

As such, the proposals apply to mid-market rent tenancies, including those provided by our members.  

The proposal amends the rent adjudication process to require a rent adjudication determination to be based on the lowest of three different comparators (open market rent, the new rent level, or a ‘maximum reasonable increase,’ defined by a new proposed ‘taper’ that kicks in at some defined ‘tipping point’). The tapering approach means that for some proposed rent increases, only a specified proportion of the proposed increase would be applied to the rent. A briefing on the proposed approach to modifying the rent adjudication process can be accessed here, for details.  

Our response reiterated calls for Scottish Government to redefine mid-market rent as a type of social housing in the upcoming Housing Bill and remove MMR from its proposed rent adjudication process.  

We noted that our membership is sympathetic to the need to protect tenants from the risk of significant and unmanageable rent increases but find this proposal ineffective and flawed. SFHA stressed that this proposal could potentially risk the viability of MMR provision—a valuable tenure that enables thousands of people on low or moderate incomes to access high quality, affordable homes.  

Our response focussed on 5 fundamental concerns within the proposal: 

1. The differences between private rent and mid-market rent is not recognised; 

2. The proposals could put investment in affordable housing at risk. 

3. The open-ended nature of the proposed transitionary measure adds to uncertainty and confusion; 

4. The proposed methodology is ambiguous, unwieldy and overly complex;  

5. The proposals do not address what is driving rising rent levels; 

A complete copy of our response can be accessed here.  

The consultation ran from 15 December to 15 January. Thanks to all who contributed to our response.   

If you have questions about our submission, or would like to discuss the proposals further, please contact apidgeon@sfha.co.uk.