Rent controls will undermine investment in Scotland’s PRS unless there is more long-term certainty, according to one leading lettings expert.

Dr John Boyle (main image), director of research and strategy at big property agency Rettie, believes controls between tenancies under the new Housing Bill will make it particularly hard for investment funds to swallow.

Speaking on the Scottish Housing News podcast, he said: “Funds need certainty about the direction in the next few years and then they can underwrite their investments, but they will be looking for at least an inflation-like return – otherwise they can’t pay pension liabilities at the back end.”

The Bill means local authorities will have to gather data and assess local rent conditions by the end of November 2026 and thereafter no less than every five years, while landlords would provide details on rents and any changes.

A decision on whether to introduce a cap and in which parts of the authority would then have to be approved by the Scottish government.

Uncertainty

“It doesn’t seem that this can be introduced any earlier than 2027, which if you’re an investor, gives you an awful lot of uncertainty – you can’t underwrite if you don’t know what your rent rises are going to be, while this is also hard for a small landlord,” said Boyle.

Although there was now doubt over some of the government’s plans following the ending of the Bute Agreement, Boyle said there was pressure to implement a system of national rent controls before the next Holyrood elections in 2026, with support from local politicians in areas such as Edinburgh and Glasgow where advertised rents as well as actual rents had been rising ahead of inflation for years.

He added: “The sector would be willing to work with the government to see if they could get an acceptable form of rent control or rent harmonisation. It needs certainty over the longer term.”