Some Build to Rent investment has been put on pause following the Scottish government’s decision to freeze rents and ban evictions until at least March.
According to The Times institutional investors into the £3.5 billion sector have been spooked by First Minister Nicola Sturgeon’s announcement.
One developer told The Sunday Times: “Investment in Scotland’s rental sector has just turned negative. Announcing this without any detail and without consultation is absolutely ridiculous.”
Prior to Sturgeon’s announcement Build to Rent was expected to have a big effect in alleviating the supply-demand imbalance in the private rented sector in Scotland – especially in the cities.
Edinburgh accounts for a third of the 11,000-plus Build to Rent homes in the pipeline in Scotland, while more than half of those planned or on site in Scotland are in Glasgow.
Demand for rented housing in Scotland rose by over a third in the first three months of this year, data from the Royal Institution of Chartered Surveyors (RICS) shows.
Sturgeon said she introduced the rent freeze and eviction ban with the intention of mitigating the impact of rising energy bills.