Director Will Scarlett

With the bill now having cleared Stage 3, Scarlett said the path is increasingly clear for a regulatory regime that may exempt BTR and mid-market rent (MMR) from new rent control measures. However, the firm warns that the strength of that outcome depends heavily on the drafting of the exemption.

Publishing its Autumn 2025 BTR Scotland review, Scarlett highlighted the persistent viability headwinds, especially for dense multi-family schemes, but argues that single family BTR could emerge as the driver that helps revive Scotland’s stalled BTR pipeline.

Housing Bill breakthrough

One of the standout developments is that the Scottish Government has committed to exempting BTR and MMR from the forthcoming permanent rent control framework. Scarlett notes that, thanks to cross-party support and consultation outcomes, the forthcoming secondary legislation is expected to define the scope of that exemption.

That said, the precise wording of that exemption will be critical, and many investors are likely to hold their fire until the detailed rules are confirmed.

Scarlett anticipates that the bill may receive Royal Assent and move into secondary legislation by late 2025 or early 2026. 

While the removal of rent control is a major enabler, the review cautions that it alone will not solve the structural challenges facing the sector — especially for multi-family (i.e. flat/apartment style) developments, where build costs, regulatory burdens, and viability hurdles persist. 

Scottish BTR pipeline under pressure

Scarlett’s data paints a mixed picture of the current pipeline:

• Scotland currently has around 5,300 operating BTR units across the country. 
• In the development pipeline, the sector has seen 2,700 units exit (for example, switching to PBSA) since the rent control announcement in mid-2022.
• Another 4,000 units are on hold, and 5,600 units are considered unviable under current conditions.
• However, Scarlett notes that 3,100 units are actively progressing, reflecting a ~60% increase compared to current operating stock. 
• In total, more than 11,000 units currently stalled across Scotland could potentially be unlocked if legislative certainty and viability improve. 

Scarlett also draws attention to the comparative scale gap: fewer than 550 single-family BTR homes are operating in Scotland, versus over 17,000 in England.

The review warns that pipeline headline numbers are often overstated because many schemes remain financially unviable, and some are quietly being rebranded or shifted into alternative uses (e.g. PBSA).

The rising case for single-family BTR

Perhaps the clearest opportunity identified in the report lies in single-family BTR (i.e. houses for rent rather than flats). Scarlett argues that this typology may become the real beneficiary of the rent control exemption:

• Single family developments generally face lower land and build costs, lighter regulatory burdens (e.g. fire/safety regimes), and easier phasing and liquidity, it said.
• The expansion of remote work and shifting commuting patterns have broadened demand zones beyond traditional urban centres, making suburban rental housing more attractive.
• Some pioneering schemes are already in place: for example, Moda’s Casa Vista Park (156 homes) and Simple Life’s BTR houses within Bertha Park, among others. 
• Yet, even with these, Scarlett argues that Scotland remains far behind comparative markets, with only ~3% of BTR units currently of the single family type.

Scarlett sees single family BTR as more “viable” than tall apartment schemes, especially in parts of Scotland where land is cheaper and density expectations are lower.

The review suggests that once regulatory certainty is in place, many of the stalled single family BTR projects may become investable, helping close the Scotland–England gap. 

The report’s conclusions and tone are cautiously constructive.

Key themes include:

• Legislative certainty is now the pivotal missing ingredient. Until the secondary regulations defining BTR exemptions are settled, many investors will remain on the sidelines. 
• Viability remains a major constraint, especially for multi-family or high-rise projects. High construction costs, regulatory and compliance burdens, and financial risk premiums all act as a drag.
• Even with an exemption, the sector needs to demonstrate robust demand and operating performance to attract institutional capital.
• The current pipeline is fragile: many projects are on hold or have been lost, and the risk of further switching into alternative uses remains.
• The underdevelopment of single family BTR in Scotland is a structural gap; realising its potential will require not just regulatory clarity but strategic land assembly, design innovation, and demand-proofing in suburban geographies.
• If rent controls are introduced without meaningful exemptions, the review argues, the BTR sector could stagnate further — locking in low supply and escalating housing stress. But with an effective exemption regime, there is opportunity to reinvigorate development and catalyse institutional investment.