The Private Housing Rent Control (Exempt Property) (Scotland) Regulations 2026 - Fairer Scotland Duty assessment

Fairer Scotland Duty summary

Title of policy, strategy or programme

Rent Control (Exempt Property) (Scotland) Regulations 2026

Summary of aims and expected outcomes of strategy, proposal, programme or policy

Purpose and intended effect

The intended outcome of the proposed regulations is to remove the perceived barriers to investment and support the supply of new Build-to-Rent (BtR) and Mid-market Rent (MMR) properties. In the case of MMR properties, this will support a sector aimed at households on low to moderate incomes.

Background

Measures set out in the Housing (Scotland) Act 2025^[1] (“the 2025 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% 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 2025 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 2025 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 impacting 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^[2] during the 2025 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.

Objective

Removing barriers to investment will benefit tenants who will live in future MMR and BtR housing, which may potentially not go ahead without the proposed exemptions. Increasing the supply of new MMR and BtR has potential to reduce pressure on rents across the private rented sector more generally with benefit for tenants even if they don’t live in an MMR or BtR property.

We recognise that it is important to consider the balance between improving supply in a way which benefits tenants overall with the potential for impacts, particularly on individual tenants who live in properties within a rent control area which would be exempt from rent controls under the proposed regulations.