The Private Housing Rent Control (Exempt Property) (Scotland) Regulations 2026 - business and regulatory impact assessment

Introduction

Measures inserted into the Private Housing (Tenancies)(Scotland) Act 2016 (“the 2016 Act”) by the Housing (Scotland) Act 2025 (“the Act”) introduce a system of long-term, evidence-based rent control across Scotland. This system of rent controls will deliver a nationally consistent approach to rent control that allows flexibility to consider local circumstances.

As part of this system, local authorities will carry out mandatory assessments of rent conditions in their area on a 5-yearly cyclical basis, ensuring that there is ongoing review of the need for rent control. The outcome of these assessments will inform the Scottish Ministers’ decisions on whether it is justified and proportionate to designate rent control areas for the purpose of protecting the social and economic interests of tenants in those areas.

In any area designated for rent control, rent increases will be capped at CPI +1% point, up to a maximum of 6%. These restrictions will apply both within and between tenancies, to stabilise the level of rents within the area and avoid the potential for rents to continue to rise more steeply between tenancies.

It is essential that these protections for tenants are balanced with the property rights of landlords, recognising that investment in a robust supply of rented homes is also fundamental to improving housing availability and affordability across Scotland for those who rent their homes.

To ensure the appropriate balance is achieved, the Act creates powers for Scottish Ministers to exempt certain categories of properties from rent control.

The introduction of rent controls has caused concern in the housing investment sector since the intention was announced as part of the Bute House Agreement in 2021 and the Act was introduced as a Bill in March 2024. Those who work with investment stakeholders have indicated that the intention to introduce rent control has impacted on the attractiveness of Scotland as a place to invest in new homes for private rent and for mid-market rent (the latter being intended to increase the supply of affordable homes in Scotland).

In order to give early consideration to these matters, the Scottish Government brought forward a consultation during the Act’s progress through Parliament. This consultation included possible use of powers to exempt certain categories of property.

Following on from this consultation, the Scottish Government announced its intention to bring forward regulations exempting mid-market rent and build-to-rent properties from rent controls under the Act. This is intended to remove the reported barriers to investment created by the intention to introduce rent controls, prioritising efforts to increase the availability of rented housing.

This BRIA builds on the considerations set out in the BRIA for the Housing (Scotland) Bill^[1], and the supporting BRIA for the Rented Sector Reform measures in the Bill^[2].