The Scottish government has divulged plans to introduce temporary changes to rent adjudication as part of the transition away from the Cost of Living Act, which caps rents north of the border.

According to Propertymark, Patrick Harvie, the Holyrood minister for zero carbon buildings, active travel and tenants’ rights, has been in contact with details of the changes, which will continue to limit rent increases to protect tenants.

In September 2023, the Scottish parliament approved an extension to the Cost of Living regulations for a final six-month period to 31 March 2024.

According to Propertymark, once the rent cap has expired, the Scottish government expects that many rent increases proposed by landlords will proceed as normal.

However, the Cost of Living legislation allows ministers to temporarily change the way rent increases referred by a tenant are adjudicated to “smooth the transition out of the rent cap and protect tenants from steep increases”.

Any transitional measure put in place using these powers would last a maximum of one year and would be subject to regular review to ensure it remains appropriate, Propertymark said.

Under the proposed transitional measures, when the emergency rent cap is removed, the Scottish government plans to amend the rent adjudication process so decisions must be based on the lowest of three comparators:

• Open market rent
• The new rent proposed by the landlord, and
• A maximum ‘reasonable’ increase for that tenancy, which will be defined by a new taper calculation.

The tapering approach would be used based on a percentage which would apply in cases where the rent increase proposed by the landlord was assessed as unreasonable.

Each specific case would be calculated based on the gap between the existing rent for a tenancy and the open market value of similar tenancies in similar properties (market rent). As part of the tapering approach, an upper limit would also be set which represents the maximum percentage increase for adjudicated rents.

“We understand the frustration felt by members as a result of these measures and the further uncertainty it brings, but we will continue to work on your behalf to campaign against rent control and influence Scottish government proposals,” Propertymark said.

Feedback on plans for the transitional arrangements is open until 4pm on Monday 15 January 2024 and Propertymark said it would welcome members’ views on the plans to inform its response.