The Private Housing Rent Control (Exempt Property) (Scotland) Regulations 2026 - equality impact assessment

Background

Measures set out in the Housing (Scotland) Act 2025 (“the Act”) introduce a system of long-term, evidence based rent control across Scotland, delivering a nationally consistent approach 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 consideration of the need for rent control. The outcome of these assessments will inform 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, rents will be capped at a maximum of CPI +1%, 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, 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. This is intended to remove the reported barriers to investment created by the intention to introduce rent controls to support efforts to increase the availability of rented housing. Tenants in properties that are exempt from rent controls will have access to the existing rent adjudication process, which will allow them to challenge a rent increase they consider to be unreasonable in relation to market rents for comparable properties in the area.

It should also be noted that the regulations propose that for a property to qualify for an MMR exemption the rent cannot exceed the median rent in the BRMA in which the MMR unit is located. Therefore, if a significant part, or all, of the BRMA falls into an rent contorl area at any point, the median rent in the BRMA will tend to be reduced due to the operation of rent controls, and this will help to ensure that MMR tenants are not adversely affected due to their tenancies being exempt.

Landlords with properties within a rent control area that are exempt under these proposals will not require to meet the requirements of rent control, but there are likely to be some administrative impacts on these exempt landlords. Many individuals who are landlords in Scotland are small-portfolio landlords, whose properties may be less likely to meet the criteria for exemptions from rent controls (for example, the minimum portfolio size) set out in the proposed regulations. In cases where properties belonging to small-portfolio landlords do meet the criteria for an exemption under the proposed measures, the exemption would be applied equitably to them.

For the purposes of EQIA, these issues may be relevant to age as a protected characteristic, as pensioners who are individual landlords in Scotland may be more impacted by the additional administrative burden, with consultation responses noting that exemptions overall may be confusing to some. However, if their property does qualify for exemption, this will offer greater financial certainty to that landlord.