The Scottish Government’s decision to lift rent controls at the end of March marks a pivotal moment for Scotland’s housing market, opening the door to renewed investment in large-scale developments. The move, welcomed by industry leaders, is expected to revitalise the rental housing sector after a period of stagnation following the introduction of rent caps in 2022.

The policy shift removes the temporary restrictions imposed under the Cost of Living Act, reinstating open market rent settings until Scotland’s Housing Bill comes into effect in 2027. Developers and investors see this as an opportunity to revive critical housing projects stalled by policy uncertainty, unlocking billions of pounds in capital and addressing long-term housing supply challenges.

Industry Backs Decision as a Catalyst for Growth

Property investors and developers have long cautioned that Scotland’s rent cap regime deterred large-scale institutional investment, restricting the growth of the private rental sector. With the return of market-driven pricing, key stakeholders anticipate a fresh wave of investment in rental housing across all tenures.  

David Poston, CEO of HP Invest, a leading investor in Scotland’s property sector, lauded the government’s decision, stating:  

“This policy shift is a crucial step towards restoring confidence in Scotland’s property market. By removing constraints on rental pricing, we can allocate significant capital to large-scale developments, ensuring Scotland remains an attractive destination for investors. This change will not only stimulate much-needed supply but also contribute to urban regeneration projects that enhance local communities.”

HP Invest, which has secured a prime site in Tradeston, Glasgow, is among the firms poised to capitalise on the shifting policy landscape. The company is leading a 1,200-unit development, part of a multi-phase regeneration project encompassing PBSA and BTR properties, retail, and leisure facilities. The project aims to deliver a 50,000-square-metre development, aligning with Glasgow’s ambition to revitalise its urban core and attract sustained investment.

Government Stance and Future Policy Direction

Scottish Housing Minister Paul McLennan reaffirmed the government’s commitment to supporting tenants while fostering a stable investment climate in a press statement.

“The temporary changes to rent adjudication were designed to ease the transition away from short-term rent caps. We recognise the importance of ensuring fairness for tenants while also creating an environment that encourages investment in housing supply.”, said the Housing Minister.

The Scottish Housing Bill, set to introduce longer-term rent control measures from 2027, is expected to provide a framework for future market regulation. Until then, developers view this period as a crucial opportunity to reinvigorate housing projects, addressing Scotland’s pressing need for modern, high-quality rental stock.

A Positive Outlook for Scotland’s Property Market

With rent controls coming to an end, property stakeholders anticipate a significant shift in investment patterns, with capital flowing back into large-scale rental developments. The decision to lift restrictions signals that Scotland remains open for business, reinforcing its position as a key player in the UK real estate sector.

As the industry moves forward, HP Invest remains at the forefront, committed to delivering high-quality developments that align with the evolving demands of Scotland’s urban landscape.