Ministers are set to extend the cap on private rent rises as the cost-of-living crisis continues to impact on households that "continue to struggle".
The current temporary rent cap for social and private rents, set at 0% and essentially a freeze, is due to come to an end in March.
Greens Tenants’ Rights Minister Patrick Harvie told MSPs he will recommend that Holyrood approves an extension to the cap on private rent rises.
But the Scottish Property Federation has accused ministers of ignoring “the serious damage that this legislation is doing to the long-term supply” of homes and “will continue to deter much needed investment to provide modern, energy-efficient rented accommodation in Scotland”.
Mr Harvie told MSPs that a ban on social rent increases will be lifted from April after the Scottish Government reached an agreement with landlords – such as councils and housing associations – to keep rises below inflationary levels of 11.1%.
Council tenants will see their rents rise by an average of less than £5 per week, while housing associations confirmed talks are ongoing to increase rents by an average of 6.1%.
READ MORE: Tenants fear looming rent rises as energy bills soar
No social landlord is consulting on a rate above inflation, Mr Harvie told MSPs.
A moratorium banning evictions will also be recommended for extension, except in a number of specified circumstances.
The rent cap expires on March 31 but Scottish ministers can seek parliamentary approval to extend the legislation for two six-month periods if necessary.
It is unclear whether ministers will recommend the cap remains at 0%.
Mr Harvie pointed to the “unprecedented challenges being faced by people across Scotland due to the ongoing cost-of-living crisis”.
He added: “This unprecedented economic position has not yet changed fundamentally and I know that many households on low and modest incomes continue to struggle.
“I would anticipate that it will remain necessary and proportionate to extend the rent cap provisions beyond March 31 in the private rented sector while recognising that the act gives power to vary what the cap actually is.”
READ MORE: Ross Greer says landlords not 'contributing anything useful to society'
MSPs would need to vote on extending the rent cap.
Scottish Property Federation director, David Melhuish, said: “The Scottish Government’s statement today on the extension of the emergency powers on rental increases for sitting private sector tenants will continue to deter much needed investment to provide modern, energy-efficient rented accommodation in Scotland.
“It is difficult to see how this can continue to be viewed as emergency legislation when the cap on some of those who are least able to pay in the social sector has, in effect, been removed.”
He added: “Further, we are disappointed that the Scottish Government continues to ignore the serious damage that this legislation is doing to the long-term supply of residential properties in Scotland.
“The uncertainty that the policy is creating has clearly increased the risk associated by investors with Scottish Build-to-Rent projects.
“Scotland needs evidence-based policy and ambition from its leaders to increase housing of all tenures. Only then can we hope to make a mark on the country’s housing crisis.”
READ MORE: Sir Tom Hunter warns rent freeze will have 'unintended consequences'
Scottish Conservative social justice, housing, and local government shadow secretary, Miles Briggs, said: “It is clear that the emergency rent freeze, which is backed by the SNP, Greens and Labour, is rapidly becoming an unmitigated disaster – so it’s madness for these measures to be extended.
“The Scottish Conservatives warned MSPs about the impact on the destabilisation of the social and private housing sectors – but social rented tenants who were likely to see an average rent increase of 6.1% could now face an 11.1% jump when the rent freeze for them expires.”
He added: “SNP, Green and Labour MSPs have voted for legislation which is now driving the housing crisis in Scotland, especially here in the capital.
“Landlords have no idea what rents they will be able to set from April and when this information will be forthcoming from the government, leading to continued uncertainty for both landlords and tenants.
“Ministers must take urgent action to prevent what come the autumn could result in a collapse in the private rental housing market.”
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