Letting agents have warned that introducing rent controls for purpose-built student accommodation (PBSA) in Scotland will have a “chilling” effect on investment.

The Scottish government has agreed to add the sector under its definition of relevant tenancies covered by the Housing (Scotland) Bill, a move which the Scottish Property Federation believes is deeply concerning.

Director David Melhuish says PBSA plays a critical and growing role in providing vitally needed accommodation to support students and takes the pressure off the wider rented sector by reducing competition between students and other residents.

Supply

“The amendment, unless revoked later in the Bill’s journey, will have a chilling effect on investment in this key sector and will further reduce the supply of accommodation available to students,” says Melhuish.

“Other provisions in the Bill have already affected other parts of the residential sector in Scotland, particularly the built-to-rent sector, where the threat of rent controls has been significant and pronounced – resulting in a halt on new planning applications for new build rental accommodation and the potential loss of some £3 billion of investment in Scotland.”

Meanwhile, First Minister John Swinney has promised to deliver more than 8,000 affordable homes for social rent, mid-market rent and low-cost home ownership as he set out his government’s legislative programme at Holyrood.

Protections

He explained: “We are taking forward an ambitious series of initiatives which will give tenants more rights and stronger protections, directly support the delivery of more than 8,000 affordable homes, including for social and mid-market rent, and remove barriers on stalled building sites with the potential to deliver up to 20,000 new homes.”

Scottish Association of Landlords' chief executive, John Blackwood (right), says it’s disappointing that the Scottish Government has failed to recognise the important role private landlords play in providing much needed homes to rent.

“The Scottish government must take action to support and encourage private landlords to invest in more homes to rent by eradicating the Additional Dwelling Supplement, which acts as a barrier to small investors in Scotland who provide the majority of homes to rent in the private rented sector,” he tells LandlordZONE.

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