A senior housing industry figure has claimed Scotland has become a "no-go zone" for investors.

He warns the SNP over housing laws that include rent controls will keep housebuilding in years of stagnation and Labour over its potential capping plans.

Will Scarlett, founder and director of Scarlett Land and Development, said that SNP rent control policies "have made Scotland a 'no-go zone' for both UK and international investors".

He added: "The country is now facing a six-to-eight-year supply gap in the construction of large-scale rental developments from 2022, when rent control was introduced, to 2027 when the current Housing Bill is scheduled to pass through parliament.

"Even if the resulting rent control mechanism is deemed acceptable to investors, it would take a further year to negotiate a funding deal and two more years to build out a large scale development. That means no practical completions before at best, 2029."

Scotland is in the grip of a housing emergencyScotland is in the grip of a housing emergency (Image: Getty Images)

In an article in the Green Street News, the Edinburgh-based expert pointed to Labour signalling favour towards councils having the power to cap rents, rather than a national policy.

Mr Scarlett said: "Rent control can work but needs to be structured in a manner that investors can accept, tracking inflation as a minimum and only applied to sitting tenancies (new tenancies). This means rent can be reset to open market levels in between tenancies (after a minimum period of say 12 months). This is a red line for investors.

He also said: "It cannot be left to each local authority to apply a different rent control regime."

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Meanwhile, he says, the list of unintended consequences is extensive and "controls have done the opposite of what they were intended to do".

"The best thing the Scottish Government could do is scrap rent control altogether. The result would be instantaneous investment in housing supply – estimated at some £3.5bn. If rent controls across the UK are politically unavoidable, then a Labour Government needs to get it right and not make the mistakes that the Scottish Government has made."

Paul McLennan, Housing Minister responded to this column: "We want to create a rented sector that both encourages investment and provides a great service to tenants.

"A fairer, well-managed private rented sector is in the interest of both tenants and responsible landlords.

"Our Housing Bill includes a package of important reforms to the rented sector, and we will continue to work with tenants, landlords and investors to ensure the measures in the Bill will support our vision for improving the supply and affordability of high-quality rented housing in Scotland."

Also this week, the Tartan Army’s conduct at Euro 2024 in Germany "has translated into huge opportunities to promote Scotland as a top tourist destination", elevating the country’s international reputation, business editor Ian McConnell writes.

Ian reports that Marc Crothall, chief executive of the Scottish Tourism Alliance, flagged potential to attract more holidaymakers to Scotland “from Germany and beyond”.

A distillery project seeking to safeguard a dwindling community in Speyside has secured almost £140,000 in backing as it prepares to open later this summer, business correspondent Kristy Dorsey writes.

The Cabrach Distillery will be the flagship asset of The Cabrach Trust and aims to help revive the remote community which was once home to a thriving illicit whisky trade. 

The funding package of loans and grants has been provided by Social Investment Scotland, Kristy reports.