Scottish rent cap policy faces backlash as landlords demand clarity and reform

Landlords in Scotland have warned that the government’s ongoing consultation on rent control exemptions is deepening uncertainty rather than resolving it, with leading property professionals branding the policy “flawed” and calling for urgent reform. The criticism comes after Housing Minister Paul McLennan launched a public consultation on how and when certain types of properties might be exempted from the proposed rent caps under the Housing (Scotland) Bill.

While the Scottish Government insists it’s aiming to “strike a balance between tenants and landlords,” industry experts argue the measures fail to address the root issues and risk scaring off much-needed private investment.

Industry leader: Rent caps will “make the situation for renters worse”
David Alexander, CEO of DJ Alexander Ltd—Scotland’s largest lettings and estate agency—has strongly criticised the policy direction. “This consultation, while welcome if it actually produces any real change, is simply tinkering at the edges of this policy when what is currently required is clarity and leadership,” he said.

He continued: “Rather than providing a workable solution, it is actually an admission that rent caps are a flawed policy that will only make the situation for renters worse. Consultation is, of course, an integral part of developing any coherent ideas or policy, but this proposal would appear to create greater confusion and uncertainty and, crucially, result in further delays in actually doing anything meaningful to address the issues facing the private rented sector.”

The current consultation proposes potential exemptions for landlords who have invested in property improvements or who charge below-market rents. However, it has also sparked concern over fairness, with Build to Rent (BTR) developers potentially being exempted entirely. This two-tier system, critics say, would hand institutional investors an advantage while penalising smaller landlords who form the backbone of Scotland’s PRS.

Rent caps risk slowing growth, pushing landlords out of Scotland
McLennan has argued that the policy is designed to “stabilise rents for tenants in areas where they are rising too steeply,” suggesting that exemptions would be carefully considered to reflect local market conditions. “We are bringing forward this consultation to seek views on how the powers within the Housing Scotland Bill could be used to exempt certain types of properties from rent control,” he explained, adding that the government aims to protect “the property rights of landlords.”

But landlords aren’t convinced. Many are pointing to the situation in Ireland as a potential warning. Micheál Martin, Ireland’s new Taoiseach, has openly acknowledged that excessive regulation has discouraged private investment in housing. He recently called for a full review of Ireland’s ‘rent pressure zones’, which are widely cited as a major factor in the country’s investor exodus.

Alexander believes Scotland should take note. “The Irish Government seems to be considering quite a powerful policy of financial incentivisation to deliver growth in the private rented sector. This, along with a realistic re-evaluation of any policy on rent caps, would certainly go some way to addressing the current issues for landlords and investors in Scotland.”

Consultation fatigue and the call for bold, practical housing solutions
Landlords say they are increasingly frustrated by what they see as endless consultations without meaningful action. One Edinburgh-based landlord with over a dozen rental properties told us: “We’ve had years of indecision. Every few months there’s a new consultation, and each one makes it harder to plan for the future. I’ve frozen all new investments until there’s more clarity.”

There’s no shortage of warnings either. The National Residential Landlords Association (NRLA) has repeatedly cautioned that heavy-handed regulation will lead to reduced supply, higher rents, and a more volatile market for tenants. “Policies that discourage investment inevitably hit tenants hardest,” an NRLA spokesperson said.

In truth, the private rented sector in Scotland is at a crossroads. With landlords weighing their future in the market, and policymakers facing increasing pressure to address the housing crisis, the stakes are high. The consultation may be open—but so is the question: will Scotland take bold steps to support responsible landlords and deliver genuine growth in the sector?

As Alexander put it: “More consultations—while sounding good—can end up simply creating another talking shop. What we need now are big ideas, not bigger delays.”

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