Scottish government proposes rent cap exemption for build-to-rent homes

However, the consultation said that offering exemptions to some tenures will help strike the right balance between supporting tenants and supporting investment in new rental homes.

It also considers where landlords could be allowed to increase rents above the cap, in instances where there have been improvements to their property or where rents have consistently been charged at a level below market rates.

Views are also being sought on how Scottish ministers’ regulation-making powers could be used to clarify how private sector joint tenancies are ended.

Next Tuesday (29 April), debate will commence on a total of 447 amendments to the Housing Bill as part of the Local Government, Housing and Planning Committee Stage 2 debates.

The Scottish government’s amendments to its own bill include limiting the rent cap to CPI+1% to a maximum of 6%, as well as laying regulations for exemptions to the regime.

A change to the target date for local authorities to make rental market assessments and recommendations on whether to introduce a rent control area is also being considered. The new date is 31 May 2027.

In addition, Evelyn Tweed MSP has tabled an amendment that introduces a clear and independent right of appeal against decisions made by the Scottish Housing Regulator (SHR), bringing greater fairness, transparency and accountability to housing regulation in Scotland.

At present, the SHR offers only an internal appeals process that lacks independence and is not widely respected by housing organisations.

While judicial review is technically available, Ms Tweed understands it to be costly, time-consuming and inaccessible to most organisations and individuals.

Shirley-Anne Somerville, Scotland’s social justice secretary, said: “Rental properties are a crucial element of our efforts to tackle the housing emergency and we want landlords to have the confidence to invest and continue to provide good-quality, affordable homes.”

The consultation came as the Scottish Property Federation (SPF), which represents developers, warned that the number of build-to-rent homes under construction across Scotland has fallen 26% in the past 12 months.

Analysis from the SPF and Savills found that a total of 1,896 build-to-rent units were under construction in Scotland in the first quarter of 2025, down from 2,545 the previous year. 

Scotland has recorded “zero growth” in the number of new build-to-rent schemes being submitted for planning, with the total number of units standing at 10,829.

The challenge the Scottish build-to-rent sector faces is one of “pipeline exhaustion”, the organisation warned. This is due to the drop-off in on-site activity and the dearth of new schemes being submitted for approval and granted planning consent.

David Melhuish, director of the SPF, said: “These figures are the natural consequence of a lack of investor confidence over the last three 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.”