Build-to-rent market warning over rent control proposals

The Scottish Property Federation (SPF) has slammed first minister Nicola Sturgeon’s proposal to introduce rent controls in certain parts of Scotland.
It says that plans to control rent in ‘high-pressure’ lettings areas in Scotland could deter investment in the private rented sector (PRS) and curtail much-needed housing supply.
Its warning comes after Sturgeon outlined plans to introduce local rent controls through a Private Tenancies Bill as part of the SNP’s legislative programme for the next eight months.
But the trade association says that, over the last few months, Scotland has seen significant, high-quality investment into the build-to-rent sector, with Grosvenor submitting plans for 400 purpose-built rental units in Edinburgh. The EDI group has also announced plans for PRS at India Quay, Edinburgh, as has Whiteburn Projects in Dundee.
The SPF says it’s concerned that even the possibility of rent controls could sound the death knell for future investment in the build-to-rent market.
It says build-to-rent has the potential to rapidly boost Scotland’s housing supply, which needs to be increased dramatically across all tenures if the current housing shortage is to be resolved.
Director David Melhuish said: “We will consider the detail of the Bill carefully when it is published but we have been trying to encourage investment into Scotland’s purpose-built rental market for a long time, and it has been great to see momentum build over the past few months with some big deals taking place. A clear message we have had from the industry, however, is that the mere prospect of rent controls, could be enough to spook potential investors bring us back to square one again.
“If the Scottish Government wants to increase housing supply, then the introduction of rent controls is not the way to do it. The purpose-built private rented sector has the potential to deliver a large amount of new homes across Scotland, and we should be doing everything we can to encourage investment in this sector rather than regulate this sector before it has had chance to take root.”