Property groups have called on the Scottish government to focus on building homes rather than rent controls in a bid to address the country’s housing crisis.

Scotland’s Housing Bill has now passed the first stage in the Scottish Parliament, but still fails to address the imbalance in the PRS between supply and rising demand, says the Scottish Property Federation.

It argues that a 45% reduction in build-to-rent construction activity in the year to October 2024 is proof that there’s an urgent need to rebuild investor confidence in Scotland to boost the delivery of new private rented homes.

Despite the Scottish government’s intention to consider exemptions from its planned rent control mechanism to support new build homes at market and mid-market rents, the federation is concerned by proposals to extend rent controls beyond sitting tenants. It says this will result in properties ‘in-between’ tenancies potentially being captured, deterring investors and potentially leading to more landlords selling up.

“The government needs to go further to restore investor confidence in Scotland and to unlock at least £2.5 billion in direct investment, kick-start some 15,000 homes at various stages of planning, and even more added value for the wider economy,” adds director David Melhuish.

Rent controls

Scottish Land & Estates agrees that the Bill prioritises rent control measures over solutions to increase housing supply. Evidence shows that rent controls can exacerbate supply issues and even drive rents up, says policy adviser Anna Gardiner.

“This legislation risks disenfranchising private landlords and stifling investment in the very housing stock we so desperately need,” she adds. “This is especially alarming in rural areas, where PRS properties play a vital role in supporting local economies and communities.”

Propertymark’s head of policy and campaigns, Timothy Douglas (pictured), believes significant amendments are needed if the Scottish government wants to raise property standards and make renting more affordable.

“This must include removing the application of rent control measures between tenancies in order to allow upgrades such as redecorating, replacing furniture, or installing energy-efficient measures to take place.”

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