Rent freeze fallout: What Scottish landlords need to know in 2025

1. A Quick Recap of the Rent Freeze

The Scottish Government introduced the Cost of Living (Tenant Protection) Act 2022 as an emergency response to rising energy bills and inflation. Initially, rents were frozen, and eviction moratoriums put in place.

    • 2022–2023: A complete rent freeze was in effect.
    • 2023–2024: Rent controls were relaxed slightly, allowing capped increases of up to 3–6% in certain cases.
    • 2024: The freeze officially ended, but new rent-setting rules and restrictions were introduced.

2. Where We Stand in 2025

Although the blanket freeze is gone, landlords are still operating under stricter rules:

    • Rent Controls by Local Authorities: Councils now have the power to designate “rent pressure zones” where increases are capped.
    • Notice Requirements: Landlords must provide detailed justification for rent rises and follow strict timelines.
    • Tribunal Oversight: Tenants can challenge increases at the First-tier Tribunal, keeping landlords accountable.

This means while landlords technically can raise rents, in practice, increases are often limited and must be well-documented.

3. The Impact on Landlords

    • Financial Strain: Some landlords—especially those with recent mortgages—have struggled to keep pace with rising interest rates while rents remained capped.
    • Portfolio Reassessment: Smaller landlords have exited the market, selling properties that no longer provide sustainable returns.
    • Professionalisation of the Sector: Those staying in the market are becoming more business-focused, factoring in compliance, energy upgrades, and long-term tenant management.

4. Opportunities Moving Forward

It’s not all bad news. Despite the challenges, demand for rental homes in Scotland remains strong:

    • Low Supply, High Demand: In urban centres like Edinburgh and Glasgow, rental shortages mean well-maintained properties still command strong interest.
    • Tenant Stability: With longer-term leases encouraged, landlords benefit from reduced turnover and more reliable income streams.
    • Government Support for Upgrades: Energy efficiency grants and tax reliefs are making property improvements more accessible, helping landlords add value.

5. What Landlords Should Do Now

    • Review Your Portfolio: Identify properties that remain profitable under the new rules, and consider selling those that don’t.
    • Stay Compliant: Keep up to date with rent control designations in your local authority.
    • Prioritise Communication: Transparent conversations with tenants about rent rises can reduce disputes.
    • Protect Your Investment: With market volatility still a factor, comprehensive landlord insurance is a must. Providers such as Insure My Landlord Insurance offer tailored cover that helps safeguard against unexpected costs.

Final Word

The rent freeze may be over, but its legacy remains. Scotland’s rental sector in 2025 is more regulated, more closely monitored, and more competitive than ever. For landlords willing to adapt, there are still strong opportunities—but success now depends on treating property as a long-term, professional investment rather than a short-term gamble.