Housing chiefs have said that Scotland is in the invidious position of tackling a lack of homes while the country has been rendered "almost uninvestable" for investors.

A bid by the Scottish Government to clarify aspects of planned rent controls under its new Housing (Scotland) Bill instead prompted housing companies to call for more clarity.

While rent controls are seen as a critical tool to help tackle the country’s housing crisis, housing industry figures have pointed to billions of pounds worth of housing investment being stalled amid uncertainty around returns.

Proponents of rent controls including the tenants’ union Living Rent and architect Malcolm Fraser say the measure is central to easing Scotland’s housing emergency and pointed to systems in Europe that were said to be successful.

Paul McLennan, the Scottish Housing Minister moved to offer more detail around the plans and proposals for index-linked rent caps were welcomed.

He said: “We are bringing forward a system of rent control that works for Scotland – a system that supports stabilisation of rents for tenants, whilst ensuring there can be a balanced approach that provides appropriate protection for the property rights of landlords and supports investment in the development of rented homes.”

The minister also said: “The Housing (Scotland) Bill includes a package of reforms which will help ensure people have a safe, secure, and affordable place to live.

“Eradicating child poverty remains this government’s priority and having a home can make a direct contribution to achieving this. This is why ensuring families can have secure and affordable homes that meet their needs is part of our approach to tackling the housing emergency.”

This week the only build-to-rent development to launch in the Scottish capital with over 460 open market and affordable rental homes brought to Bonnington was hailed.

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However, Jean-Marc Vandevivere, chief executive at PLATFORM_, said: “With close to 1,000 BTR (build-to-rent) units operational in Glasgow and Edinburgh by the end of the year, we look forward to finally getting clarity on the regulatory front from the Scottish Government.

“This will hopefully allow us to start investing again into new projects and deliver even more much-needed rental housing across Scotland.”

Platform_ also said: “Our latest project in Edinburgh has opened, making it the only new BTR scheme to launch in Scotland’s capital city in 2024.”
“This 464-apartment development, backed by Heimstaden, addresses Edinburgh’s growing need for rental housing, with 25% of the homes designated for intermediate market rent.

The Scottish Government said a consultation in spring 2025 “will seek views on how powers that allow exemption from rent controls or rent increases above the cap could be used by Scottish Ministers”.

The More Homes More Quickly lobby group said the ministerial statement “was a missed opportunity to restore investment in Scotland’s rental sector”, adding: “Despite two years since the rent freeze and a year of consultation, today’s vague statement will do nothing to revive large-scale, high-quality rental development.

“While index-linked rent caps address some concerns, continued controls on rent between tenancies and unclear exemptions still leave Scotland almost uninvestable to housing investors.

“With the Bill’s final form unclear until as late as late 2025, uncertainty remains high, further stalling housing supply amidst rising homelessness and a housing emergency.”

The group added: “Without decisive action, Scotland risks a worsening housing crisis, economic strain, and continued hardship for those needing homes.”