Private renting rent increases in Scotland

Landlords are entitled to increase the rent they charge, as long as they follow the correct procedures and the proposed rent increase is not excessive or unfair. The Tenancy agreement should include clauses for how and when the rent will be reviewed. The general rules for rent increases are:

• the landlord must get the tenant's permission if they want to increase the rent by more than what was previously agreed
• the landlord should also only increase rent in line with similar properties in the area (ie they cannot push for an unrealistic or unfair increase in rent)

Private residential tenancies

If the tenant is on a private residential tenancy (any tenancy created on or after 1 December 2017) the landlord can only increase the rent once every 12 months. The landlord also needs to give the tenant 3 months notice of the rent increase, using the correct notice.

When giving this notice, the landlord must use the Landlord’s rent-increase notice to tenants. Where the landlord fails to use this notice, the notice will not be effective. A rent increase notice should set out:

• the new rent that the landlord wants to charge
• from what date the higher rent will become effective (tenants should be given 3 clear months before the rent increase is to set in)
• the tenant's rights (including to refer the proposed increase to a rent officer)

The form should be completed by the tenant and returned to the landlord. Failure to do this can result in the landlord believing that the tenant had agreed to the increase and the tenant will have to pay the higher rent from the date of the notice.

Where a tenant believes that the proposed rent increase is unreasonable, they can apply to the Rent Service Scotland for a rent adjudication. A rent officer will then set the rent level based on a range of information regarding the property. The rent officer has the ability to increase the rent (if they believe it should be higher) or decrease the rent (if they think it’s too high).

The tenant simply returning the completed notice to the landlord will not automatically trigger an application to a rent officer. Instead, tenants will have to apply to them directly within 21 days.

Assured tenants

If the tenant is an assured tenant, the landlord cannot increase the rent until the fixed-term ends. If the landlord wants to increase the rent during the fixed term, the tenant must agree to an increase or there must be a clause in the tenancy agreement which allows them to do this. After the fixed term has expired, the landlord can increase the rent by:

• giving the tenant written notice of the proposed increase using Form AT2 (this can only be given to the tenant once per year)

• giving the tenant written notice to change the terms of the tenancy (including the rent change) using Form AT1(L) (this can only be given to the tenant after the landlord has served them with a notice to quit) 

The landlord must give the tenant as lease one rental period of notice before the rent increase becomes effective. For example, if the tenant pays rent monthly, the landlord must give the tenant at least one month’s notice before the rent can increase. 

Short assured tenants

If the tenant is a short assured tenant, the landlord cannot increase the rent until the fixed term ends. The landlord can increase the rent when the tenancy agreement is renewed at the end of the fixed term. 

Regulated tenants

If the tenant is a regulated tenant, the landlord can increase the rent by complying with the procedure for registering a fair rent.

A tenant may be able to challenge an increase in rent if they believe it to be too high (or not fair in the case of regulated tenants) in the Housing and Property Chamber if they are:

• an assured tenant

• a short assured tenant

• a regulated tenant

Where a tenant has a residential tenancy, they can only apply to a rent officer where they believe the rent increase to be unreasonable. The rent officer will then decide whether the rent increase is fair and how much the tenant should pay.

It may not be beneficial for the landlord to impose an increase in rent. The tenant may no longer want to rent the property, in which case, the landlord will have to spend time and expenses in trying to re-let the property. It may also be an inconvenience for the landlord to try and find suitable replacement tenants, especially if there was a good relationship with the previous tenants. 

The tenant will want to either have the rent stay the same, or have a minimal increase in the rent. Therefore it could be advantageous to negotiate the rent increase. These negotiations could include the level of rent increase both parties are happy with or to roll out the rent increase in incremental stages over a period of time (for example, an increase of £25 in the first 6 months and then an increase of £50 for 6 months after that).