Rent controls push a quarter of rural lets out of the market

Scottish Land and Estates reports that in the predominantly rural council areas identified, the number of homes advertised for rent is lower than a year ago. The Highlands are the worst affected, with 1,000 fewer homes listed for rent, whilst Argyll and Bute are seeing a 24% reduction since 2024.

Propertymark successfully lobbied for local authorities to be required to conduct rural impact assessments during Stage 2 scrutiny of the Housing (Scotland) Act 2025. This is of relevance for agents because reduced supply doesn’t just limit tenant choice; it can intensify competition for homes, drive up rents on re-let properties, and increase day-to-day pressures as landlords reassess risk and long-term viability.

Why Propertymark opposes rent controls

The introduction of rent controls often splits the PRS into two parts: controlled dwellings, which are typically in less affluent areas where demand is high, and uncontrolled dwellings, which are typically newly built or luxury properties in more affluent areas.

Artificially suppressing rental prices has the knock-on effect of devaluing landlords’ properties. To balance this, owners are more likely to reduce spending on maintenance and improvements, which in turn brings down the quality of the homes available.

Landlords who cannot cover their costs under controlled rent rules will choose to sell, creating or worsening an imbalance between supply and demand in the PRS. People looking for a rented home are more likely to be forced to rent more expensive properties outside of the controlled area or accept a lower standard of accommodation.

When the Scottish Cost of Living measures were in place, a survey of Propertymark members revealed that 100% found landlords more inclined to raise rents between tenancies. The result of this was that Scotland experienced average rent rises comparable to London between April 2022 and April 2023, significantly more than other areas of the UK.

Representing members in Scotland

The Housing (Scotland) Act 2025 creates a framework for long-term rent controls, new tenant rights (including around pets and making changes to the home), and stronger homelessness prevention duties. Much of the detail will be set through secondary legislation and guidance, so implementation will be phased over the next few years.

We have consistently raised concerns about the legislation, including its failure to incentivise new housing development. MSPs have also criticised the Bill for not delivering solutions to increase housing supply or improve the quality of existing stock. Although we remain concerned about the long-term impact of rent control, it is positive that the Scottish Government has listened to our calls for greater clarity and capped annual increases at CPI+1% up to a maximum of 6%.

We will continue to urge policymakers to focus on reforms that expand supply and improve affordability without reducing investment. The long-term aim for the Scottish Government must be to rebalance supply and demand levels for private rented property. A review of all recent tax changes that impact private landlords is urgently needed and must form part of future reform.