SFHA response to Scottish Government call for ideas on Permitted Development Rights

Last year, Scottish Government introduced temporary changes to PRT rent adjudication to, in their words, “support the transition away from the short-term rent cap that was in place under the Cost-of-Living Act 2022.” These changes were called the Rent Adjudication (Temporary Modification) (Scotland) Regulations 2024, which introduced a tapering formula for rent increases based on the gap between current rent levels and the open  market rent.  

On 4 February, the Scottish Government confirmed that the Rent Adjudication (Temporary Modification) (Scotland) Regulations 2024 will expire on 31 March 2025.  

As a result, the rent adjudication process will revert back to existing legal requirements, which are based on market rent, from 01 April 2025.  

For the transition period, Scottish Ministers will shortly be laying Regulations in Parliament seeking to introduce saving provisions which will ensure that any applications for a rent adjudication that have yet to be finalised or that are being appealed will continue to be decided on the basis of the temporary changes.  

After 31 March, open market levels rent setting will resume in the private sector.  

For SFHA members with MMR properties, this means starting rents will be no higher than the Local Housing Allowance rate for the property size in question (as per grant conditions) and any rent increases will continue to be guided by i) reference to LHA/BRMA  ii) informed by analysis of local private rented markets and iii) median private rent levels for the area.  

It will continue to be the case that for SFHA members that for most MMR properties, the annual increase will not exceed the mid-point of the market rent levels for the property sizes in question in the relevant Broad Rental Market Area (as assessed by the Scottish Government).  

All April 2025 to March 2026 LHA rates have been frozen at the rate last determined on 31st January 2024.  

It continues to be the case that tenants require 3 months’ notice of any changes to rent and rent cannot be increased more than once in any twelve month period.  

Rent Service Scotland (RSS)  will continue to adjudicate cases as per the rent adjudication process prior to the Cost of Living (Tenant Protection) (Scotland) Act 2022.  

Under the Private Housing (Tenancies) (Scotland) Act 2016, all tenants with a private residential tenancy—including MMR—may make an application to a Rent Officer with RSS for a rent adjudication assessment. The decision by RSS can be appealed to the First-tier Tribunal (FTT) by the landlord or the tenant.  

This announcement comes while the Housing Bill, which contains PRS rent control proposals, continues to make its way through the Parliamentary process. At the end of last year, Housing Minister Paul McLennan announced a spring 2025 consultation to seek views on which properties should be exempted from PRS rent controls through secondary legislation. Scottish Government has proposed PRS rent caps at CPI + 1% (up to a maximum 6%) in rent control areas.  

SFHA continues to engage with the Rented Housing Legislation and Reform Unit leading the relevant PRS portions of the Housing Bill. SFHA also continues to support calls on the UK Government to unfreeze LHA rates.