There are fewer build-to-rent projects in Scotland so far this year – which the Scottish Property Federation and Savills blamed on rent control proposals.
There’s been a 26% drop in build-to-rent homes being constructed in the first quarter of 2025 year-on-year, taking the number of units under construction from 2,545 last year to 1,896 this year.
Scotland’s last set of rent controls ended at the start of this month, though new restrictions are expected to come into force in 2027.
Rent increases are set to be capped at CPI+1% up to a maximum of 6% within a rent control area, a more relaxed policy compared to a previous 3% rent cap.
David Melhuish, director of the Scottish Property Federation, a trade association, 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 3 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 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.
“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.”
