0:01 AM, 29th April 2025, About 2 weeks ago 1
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Rent controls are to blame for the plummet in build-to-rent construction (BtR), claims industry body.
According to an analysis by the Scottish Property Federation and Savills, the number of BtR homes under construction across Scotland has plunged by 26% in the past 12 months.
Rent controls ended in March this year, which limited increases to 12%. However, under the Scottish Housing Bill, the Scottish government has set out plans for long-term rent controls, which the Scottish government claims will create ‘a fairer and better regulated private rented sector’.
The Scottish Conservatives slam the SNP for “pursuing reckless rent control policies that drive out investment.”
According to the Scottish Property Federation, the total number of BtR units under construction in the first quarter of 2025 down to 1,896, compared to 2,545 homes in the same period the previous year.
The Scottish Property Federation says that while BtR construction has slowed down in England, it hasn’t seen the same drop as in Scotland. In England, there has been growth in the future pipeline of schemes progressing through the planning system.
However, Scotland has recorded zero growth in the number of new BtR schemes being submitted for planning, with the total number of units standing at 10,829. This contrasts with England, which has seen a 6% increase between Q1 2024 and Q1 2025.
David Melhuish, director of the Scottish Property Federation, blames the lack of BtR construction on a lack of investor confidence, due to rent controls.
He said: “This disappointing evidence of zero growth in new BtR applications is sadly not surprising and echoes what we have been saying for years as a sector to the Scottish government. These figures are the natural consequence of a lack of investor confidence over the last three years in the future of Scotland’s Build to Rent sector as a result of persistent policy uncertainty, especially around rent controls.
“Looking forward, we urge the Scottish Parliament to agree to amend the Housing Bill in line with the government’s proposals on an inflation-related and capped rent control mechanism. If introduced with incentives for new build rental homes, including mid-market rental homes, this will, we believe, begin to restore investor confidence in the future of Scotland’s BtR sector.”
He adds, the Scottish government must provide more investor confidence.
He said: “While construction activity has slowed across the whole of the UK, Scotland has seen the most significant fall.
“Unless the Scottish government moves to restore investor confidence through supporting new build and amending some of its more controversial policies such as between tenancy rent controls, then we will soon exhaust the new supply pipeline of BtR homes as no new planning applications are coming forward and those with approval are simply not being progressed.”
Scottish Conservative shadow housing secretary Meghan Gallacher MSP, accused the SNP of pursuing reckless policies that have harmed the housing sector.
She told Property118: “The collapse in Build-to-Rent construction is the direct result of the SNP’s refusal to listen.
“We warned them repeatedly that their reckless rent control policies would drive investment out of Scotland’s housing sector.
“They ignored us. They dismissed the industry’s concerns. Now, there are no new planning applications, projects with approval are stalled, and the pipeline is drying up fast.
“During a housing emergency, the last thing would-be renters need is fewer properties on the market – but that is what the SNP, by following extremist Greens policies, have ensured.
“Their hostility toward private investment has sabotaged Scotland’s rental market, and tenants will be the ones to suffer.”
The Scottish government have released a consultation on rent control exemptions. The consultation proposes exempting BTR developers from rent controls.
The consultation says BTR providers are typically long-term investors and provide a steady supply of homes.
However, the consultation does admit that tenant groups may raise concerns if BTR properties are excluded from rent controls.
The consultation is open until the 18th of July.
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Sign Up11:41 AM, 29th April 2025, About 2 weeks ago
BTR is not for the average renter who is catered for by the BTL sector. It is for those in core cities who choose renting as a lifestyle choice, want better facilities and higher quality, and are prepared to pay what it costs.