Short Assured Tenancies - do they fall out with the rent cap?

We have always concurred with the advice from SAL (Scottish Association of Landlords) that the rent cap – introduced through the COLA legislation – never applied to any assured or short assured tenancies which contained a rent increase clause in the tenancy agreement.  The rent for these types of tenancies could be increased in line with whatever increase is permitted in the rent increase clause.

However, we had recent experience of increasing the rent for a Tenant who was on a SAT by 10% (still well below market rent).  The Tenant receives housing benefits and when he approached the City of Edinburgh Council the Council advised him that a Landlord or Agent was not permitted to increase the rent by more than the permitted 3% or 6%.  Despite the evidence to the contrary supplied by us, they were firm in their position and the Tenant has experienced a small monthly arrears since then – c 8 months.  This has caused an understandable level of frustration.  Fortunately, our relationship with this very long-term Tenant is excellent and they have been trying to help challenge this decision.  The irony is that if these Tenants had to move house they would be entitled to c 50% more under the Local Housing Allowance levels for the same size of property.

We were pleased therefore to receive an update from the First Tier Tribunal case about raising the rent on a SAT – and this does indeed confirm that these Tenants are exempt from the COLA rent cap.  We have now shared this case outcome with the Council and we look forward to their response and anticipate them backdating the housing benefit element.