Scottish Housing Bill passes final stage but critics warn it will create a hostile environment for investors

The Scottish Housing Bill has passed stage three and is expected to gain Royal Assent within weeks.

The news has prompted a mixed reaction, with the Scottish Conservatives arguing the bill will do nothing to tackle the housing emergency in Scotland.

Under the bill, ministers will have the power to implement a system of long-term rent controls, although build-to-rent providers will be exempt.

Passing the bill is a landmark moment for how we prevent homelessness in Scotland

The Scottish Government voted by 89 votes to 28 to pass the bill, which will be implemented in Scotland’s private rented sector from March next year.

Housing Secretary Màiri McAllan says Awaab’s Law will also be implemented from March 2026. The law will require Scottish landlords to fix damp and mould within strict timeframes, though the exact deadlines have yet to be confirmed.

Ms McAllan said: “Passing the Housing (Scotland) Bill is a landmark moment for how we prevent homelessness in Scotland. Whilst we already have some of the strongest homelessness rights of any country, we will now go even further to a create a gold-standard homelessness prevention system.

“Families across Scotland will have the confidence that their rented home will be free from damp and mould as we take forward work to implement ‘Awaab’s Law’. We will now work at pace to lay regulations to implement these protections from March.

“Scotland has already led the way in protecting tenants and providing strong rights when people are homeless and now the bill will revolutionise homelessness prevention and ensure rents are kept affordable.”

The bill will continue to create a hostile environment for investors

The Scottish Conservatives slammed the bill and claimed it would create a “hostile environment for investors.”

They argued that rent controls would do more harm than good for the sector. Under the bill, in designated rent control areas, annual rent increases will be capped at CPI + 1%, up to a maximum of 6%.

Scottish Conservative shadow housing secretary Meghan Gallacher MSP told Property118: “This bill will continue to create a hostile environment for investors and do nothing to tackle the housing emergency.

“Just yesterday, damning figures showed housebuilding is in freefall under the SNP, and this disastrous bill will make it even harder for Scots to get a home of their own.

“We submitted constructive amendments to improve this bill, but the nationalists ignored them in a desperate bid to appease the extremist Greens.

“The Scottish Conservatives remain opposed to rent controls, which is why we voted against the bill. We will continue to push the SNP to come up with a real plan to address the housing emergency.”

Industry reaction to the Scottish Housing Bill

John Blackwood, chief executive of the Scottish Association of Landlords (SAL), said the real test of the bill would come during the regulation stage and urged the Scottish government to work with landlords rather than pitting landlords and tenants against each other.

He said: “The passing of the Housing Bill is a critical moment for Scotland’s private rented sector and housing in our country.

“While we were pleased to welcome some sensible modifications on issues such as rent controls, our attention now turns to the regulation process, which will also be crucial.

“SAL has enjoyed working with the new Cabinet Secretary for Housing and we will continue to engage positively with her to ensure that Scotland’s private rented sector works for everyone.

“In particular, we are keen to work with all stakeholders to end the adversarial narrative, encouraged by some politicians, that seeks to pit landlords against tenants, rather than viewing us as partners.”

Timothy Douglas, head of policy and campaigns at Propertymark, said: “Whilst we don’t agree with rent control, we are pleased that the Scottish government listened to our concerns and amended the legislation so where rent controls are introduced in designated areas annual rent increases will be capped at the Consumer Price Index (CPI) plus 1%, with a maximum annual increase of 6%.

“Furthermore, we continue to make the case for a fairer tax regime for private landlords with the Scottish government currently reviewing elements of Land and Buildings Transaction Tax as well as a level playing field for landlords against institutional investors. To this end, it is positive that the Cabinet Secretary has committed to explore the possibility of regulations that would allow for rent increases in rent control areas where the rent has been held consistently below market rent or where there has been investment in improvements to the quality of the rented property.”