Rents in Scotland are set to be frozen until March 2023 as part of a package of measures to help people cope with the cost of living crisis.
The emergency legislation will apply to renters in both the public and private sectors, the Scottish Government has announced.
It is also introducing a moratorium on evictions, meaning landlords will not be able to force renters to leave their homes, even if they fall behind with their rent.
The rent freeze will be accompanied by a new tenants’ rights campaign, as well as a one-stop website that will give people information on the benefits and support that is available if they are struggling to keep up with their bills.
Campaigners are calling for a similar rent freeze and eviction ban to be introduced for renters in other parts of the UK.
Generation Rent said: “Every renter deserves certainty that they won’t be hit with further costs.”
The cost of living crisis requires action on a scale we saw during the pandemic. The Scottish Government knows this, so it is freezing rents and suspending evictions.
— Generation Rent (@genrentuk) September 6, 2022
We need the same emergency action from Westminster #FreezeRentsNotRentershttps://t.co/IthpLAtY3X
However, there are fears that introducing a cap on private rents could force more landlords out of the rental sector, worsening the situation for renters in a market where the supply of rental homes is already strained.
UK government proposes rent cap for social housing
The UK government recently launched a consultation on introducing a cap on rent increases for people living in social housing.
However, the proposals don't include the private sector.
It is proposing limiting any rent increases on council and housing association homes to 3%, 5% or 7% from 1 April 2023 to 31 March 2024.
It estimates the move would save social housing renters around £300 a year each.
The government regulates how much social housing rents can increase by each year.
But rises are set at the rate of inflation as measured by the Consumer Prices Index plus 1%, meaning social housing renters could face increases of 11% next year without intervention.
Government plans for the private rental sector
A separate consultation has also been launched on setting a minimum standard for homes in the private rented sector for the first time.
The Decent Homes Standard would require homes in the private rented sector to be kept in a good state of repair with efficient heating and suitable facilities, while being free from serious hazards, such as major damp or fire risks.
Zoopla's Executive Director of Research, Richard Donnell, says: "The UK has seen a greater focus on the taxation of landlords and regulations to improve standards of housing rather than controlling rents.
"UK landlords have some of the toughest tax treatments and the Rental Reform Bill in England will improve standards of homes but also increase costs further.
"Against this regulatory backdrop, talk of possible rent controls will simply push more to exit the sector worsening the supply problem pushing rents up in the first place.
"It is important policy makers focus on the supply side problems in the rented sector in addition to the level of rents as the two are inextricably linked.
"We need to ensure policies and regulations encourage as many decent landlords as possible to remain in the market, otherwise the market will not grow and will start to decline in size, pushing rents up further."
Why is this happening?
Inflation, which measures the rate at which the cost of things increases, is currently running at a 40-year high of 10.1%.
One of the biggest increases people face is soaring gas and electricity bills.
The average household will see their combined energy bill rise from £1,277 at the beginning of the year to £3,549 from October after the energy price cap was increased, with some forecasts suggesting it could hit £5,300 in January.
Announcing the measures, First Minister Nicola Sturgeon said the magnitude of action needed to help people cope with the rising cost of living was on a scale similar to the initial response to the Covid-19 pandemic.
Who does it affect?
The rent freeze and eviction ban apply to renters in both the public and private sector until at least 31 March 2023.
The emergency legislation will take effect immediately.
But it will only help people who rent a home in Scotland. Renters in England, Wales and Northern Ireland will need to wait to see if similar legislation is introduced.