SPF welcomes the exemption of Built to Rent and Mid Market Rent from rent control

Investment boost for Scotland as government moves to exempt BTR and MMR from PRS Rent Caps

Yesterday marked a significant day for the Scottish Build to Rent (BTR) sector, as the Scottish Government laid secondary legislation under the Housing (Scotland) Act to exempt build-to-rent and mid-market rent (MMR) homes from rent controls. This follows a nearly two-year process of amendment of the Housing (Scotland) Bill, enacted last November during which both government and opposition MSPs have introduced significant improvements to the Bill in order to support and encourage new housing investment in Scotland. 

This is a vital move to incentivise the sector to deliver high-quality, professionally managed rental accommodation and is critical to tackling Scotland’s housing emergency. Build-to-Rent and Mid-Market Rent play a key role in increasing supply, raising standards, and offering long-term, stable homes for renters. The Regulations, subject to parliamentary approval, will come into force on 1 April. They will help to provide the sector with confidence to diversify and develop this new residential sector in Scotland. This could include greater delivery of single-family rental housing which has grown considerably in other parts of the UK in recent years.

After years of uncertainty and the freezing of a promising pipeline of BTR investment following the September 2022 rent freeze, which put some 17,000 new homes and £3bn of new investment at risk, the Scottish Government's decision recognises the need to support the growth of this sector and to rebuild investor confidence, enabling much-needed development to move forward.

David Melhuish, Director, Scottish Property Federation, said:  

“This is a critical signal to the real estate sector and wider investor community that Scotland is once again open for build-to-rent and mid-market rent investment. There is a clear and growing need for large-scale, high-quality, professionally managed, energy-efficient new rental homes.

After several years of uncertainty, we believe these Regulations now provide a genuine platform for major investment in this residential sector. With the right support, build-to-rent and mid-market rent have the potential to deliver new homes at both scale and pace across Scotland.

We not only urge all parties in the Scottish Parliament to recognise the importance of this opportunity and support these Regulations to unlock new investment and accelerate the delivery of much-needed rental homes but also continue to foster a positive investment climate as we head into the May elections and beyond.”