Scottish BTR schemes plummet as rent controls deter investors

The construction of Build-to-Rent homes in Scotland is dwindling, with a 15% drop in units under development in the second quarter of 2025 compared to the same period in 2024.

That’s according to a report by the Scottish Property Federation (SPF) and Savills.

The SPF is now warning that without urgent action, which includes exempting BTR from rent controls, Scotland risks exhausting its supply of new rental homes.

It found that the total number of BTR units currently being built has fallen to 2,101, down from 2,472 a year ago, raising concerns about the sector’s future viability.

Despite the Scottish Government’s recent efforts to promote residential investment, including in the BTR sector, the looming threat of rent control policies has significantly dampened investor enthusiasm.

This has led to a bottleneck, with 11,103 BTR homes stalled in the planning phase, unable to progress to construction.

Exhaust BTR pipeline

SPF director, David Melhuish, said: “The continued decline in the number of BTR schemes starting on site, reflect that persistent policy uncertainty, especially around rent controls, continues to have a damaging impact upon investor confidence in Scottish BTR.

“On this trajectory Scotland will soon exhaust the pipeline of new BTR developments, as completions continue to exceed commencements.”

Need a rental home supply

Mr Melhuish continued: “To restore investor confidence and to kick start a new supply of rental homes, we are calling as part of our response to the Scottish Government’s recent Housing consultation, for Built to Rent/Mid- Market rent to be granted an exemption from rent controls across Scotland.”

The report also highlights a growing imbalance, as completed BTR projects surged by 16% in the second quarter compared to the previous year, outpacing new starts and depleting the development pipeline.

The SPF attributes the slowdown to investor uncertainty, exacerbated by challenging economic conditions and the proposed rent control measures in the Housing (Scotland) Bill.

To address this, the SPF is advocating for a complete exemption of BTR properties from these restrictions, arguing that such a move is essential to revive investor confidence and stimulate growth in the sector.