Scotland's Housing Bill sparks industry concern
New Bill gives powers for long-term rent control - SPF questions impact on BtR
8 October 2025
The Scottish Parliament has passed the Housing (Scotland) Bill, granting Ministers the authority to implement long-term rent controls as part of efforts to tackle housing affordability.
While the government sees the legislation as a major step toward addressing the housing crisis, property industry leaders warn that the measures could deter critical investment in the private rented sector.
The Bill introduces wide-ranging powers for the Scottish Government to set rent controls, with Ministers expected to use an index-linked approach with a cap on annual increases. This mechanism was welcomed by some in the industry as a move toward predictability, but concerns remain over the potential extension of controls to vacant properties between tenancies.
David Melhuish, Director of the Scottish Property Federation (SPF), said: “Today’s statement by the Housing Minister offers a welcome clarification on the amendment to the rent control measures. The index-related measure with a cap aligns closely with the suggestions made by us and several other organisations in May.
“However, the ongoing extension of rent controls to vacant properties between tenancies poses a significant risk of undermining the benefits of this amendment. Investors remain cautious about entering a market where their properties could be subjected to rent controls simply because they are located in a controlled area.”
Further uncertainty has been introduced by the government’s timeline for consulting on exemptions to the new rent controls, which is not expected to begin until Spring 2025. The SPF has warned that this delay could negatively affect investment decisions across the Build-to-Rent (BTR) and mid-market rental segments.
“Without clarity and timely engagement, we risk losing the potential for thousands of new homes and at least £3 billion in investment interest,” said Melhuish. “Scotland cannot afford to remain in a cycle of undersupply in the rented sector.”
The Scottish Government argues that rent controls are necessary to keep housing affordable and to provide stability for tenants. However, with legislative details still to be finalised, the industry is calling for a clear and balanced framework that protects both renters and investment confidence.
While the Bill also includes provisions related to homelessness prevention and health and safety standards in rented homes, the debate around rent control is likely to remain central as the legislation moves into its implementation phase.
