The number of newly built rentals under construction in Scotland has plummeted 26% in the past year, putting even more pressure on SNPs to regain public support ahead of next year’s Holyrood election.
According to Savills data shared with the Scottish Property Federation and the Financial Times, 1,896 construction units were under construction in the first quarter of this year, down from 2,545 in the same period last year.
In contrast, England recorded a “much larger reduction” in construction activities in the same time frame, with the number of units submitted for the plan increasing by 6%, increasing the prospect of more divergence between Scotland, the UK and Wales.
The SNP, which was abused in last year’s general election, focuses on maintaining a lead over Scottish labor ahead of the May 2026 election.
John Swinney’s First Minister has pledged to focus on mainstream concerns, such as child poverty and efforts to grow. More investments in affordable housing have become part of his pitch to voters.
The SPF states that Scotland is facing “pipeline fatigue” in its property, such new schemes have been submitted for planning during the period and no decline in activity on-site has been submitted.
“These figures are the natural consequences of the lack of investor confidence over the past three years of the future in the Scottish build rent sector, especially as a result of sustained policy uncertainty regarding rent management.”
The Scottish government, which introduced an emergency rent cap in September 2022, has passed legislation that applies permanent control after the temporary measures that ended last month.
The 3-6% increase in rental restrictions ended in March 2024. Over the past year, renters have the authority to arbitrate the adjustments of tenants.
Congress will discuss the housing bill next week. This is planned to introduce long-term rent management from 2027 after the implementation of the Secondary Act.
Industry groups claim that the introduction of rent management has curtailed £3 billion in investments in build-to-rent schemes that are thriving south of the border. The governments in England and Wales do not support rent control.
The permanent curb puts Scotland at a disadvantage in attracting investment in the entire housing stock, they added.
Leslie Gavin, an Edinburgh-based startup that tracks homes in NewBuild, said Scotland has rental properties from over 6,800 buildings, with plans agreement not yet built, and there is another 1,900 in its approval pipeline. This is compared to almost 3,450 completed units.
According to the latest government statistics, new construction of all homes fell by 9% in 2024. It formed the lowest 12-month figure since 2013, said Lettings Agency DJ Alexander.
In response to industry feedback, the Scottish government has announced an amendment to the housing bill, raising the rental cap from scratch to 1%, plus inflation. We also discuss build-to-rent schemes and exemptions from more affordable “market rental” home control.
The change has been criticized by Scotland Greens, who warn of rising rents that are expanding during residential emergency.
Those who described the discussion said rent control exemptions should be recommended after the 12-week consultation period scheduled to begin this month.
Attending a real estate conference this month, Deputy Minister Kate Forbes acknowledged that the government “needs to get it right” to bring about economic growth.
“Your interest and my interest are consistent with these issues because I want an environment that supports investment,” she said.
According to James Blakey, planning director for developer Moda Group, developers are already employing potential investments as developers have increased confidence that sectors will be exempt from rent management.
The rent management exemption “will be a big trigger for investors like Moda to take it seriously again in Scotland,” he said.
The Scottish government recognises that Scotland needs a thriving private rental sector that offers high quality, affordable housing options, while assessing the benefits offered by investments in rental property.”
