First Refusal Rights for Private Tenants – A Step Forward or a Misstep?

First Refusal Rights for Private Tenants – A Step Forward or a Misstep?

The Scottish Government’s proposal to introduce a right of first refusal for private tenants has understandably drawn attention. On the surface, it is positioned as a measure to provide tenants with greater security and an opportunity to purchase the home they live in. However, when you look more closely, the purpose, practicality and wider consequences of such a policy become far less clear.

At its heart, this proposal appears to be trying to address the disruption tenants face when a landlord decides to sell. There is no question that being asked to leave a home can be unsettling. It can affect schooling, work, finances and overall stability. For some, it is more than an inconvenience, it is a genuinely stressful life event.

But the question remains: is granting a tenant first refusal the right solution to that problem?

Is this solving the right issue?

For many tenants, renting is not a permanent destination. It is a stage. A stepping stone towards home ownership, or a flexible arrangement that suits their circumstances at a particular point in life.

When tenants do go on to buy, it is rarely the property they currently live in. More often, they choose something different, perhaps a new location, a different type of home, or something better suited to long term plans. The idea that a tenant is simply waiting for the opportunity to purchase their rented home does not reflect how most people move through the market.

So what problem is this policy truly trying to solve?

If the concern is disruption, then there may be more direct and effective ways to address that, without interfering in the natural process of buying and selling property.

A question of fairness

There is also a broader question around fairness.  Why should a tenant have the first opportunity to purchase a property over any other buyer? Particularly when the landlord has taken on the financial risk of ownership, maintained the property, and may be relying on the sale for their own future plans.
The market, at its best, works on openness and competition. Introducing a layer where one party is given priority access risks distorting that balance.

It also raises practical concerns. What does a “fair market price” actually mean in this context? Who determines it? How is it agreed? These are not small details. They go to the core of whether the system could function smoothly or become a source of dispute and delay.

As Scottish Association of Landlords has rightly highlighted, much will depend on how this is defined and implemented in practice.

The unintended consequences

There is a growing concern that well intentioned policies such as this can have the opposite effect.
If landlords feel that selling a property will become more complex, slower, or less certain, it may influence their decision to remain in the market at all. The result could be fewer rental properties available, reduced choice for tenants, and increased pressure on rents.

It may also impact first time buyers. If supply tightens further, it becomes harder, not easier, for people to get onto the property ladder.

The concern that this could “spook landlords and choke off supply” is not without foundation. We have already seen how sensitive the private rented sector is to regulatory change.

A more practical approach

If the aim is to support tenants, there are arguably more balanced ways to do so.  One area that deserves real attention is notice periods. For many tenants, three months simply is not enough time to find a new home, particularly in a competitive market. Moving is not just about securing a property, it involves finances, logistics, schooling, and work commitments.

There is a strong case for linking notice periods to the length of the tenancy. A tenant who has lived in a property for several years should reasonably expect more time to make arrangements than someone who has only recently moved in. This would offer meaningful support without interfering in the sale process itself.

What is the real objective?

Policies like this often come from a place of wanting to create fairness and stability. Those are the right ambitions. But the route to achieving them matters.

At present, it is difficult to see how giving tenants a right of first refusal meaningfully improves outcomes for the majority. It risks adding complexity, creating uncertainty, and potentially reducing supply, all while not fully addressing the root issue of tenant disruption.

Sometimes, the most effective solutions are the simplest ones. Providing tenants with more time, clearer communication, and a stable framework to plan their next move may ultimately deliver far more than reshaping the rules of property ownership.

In a market that is already under pressure, any change needs to be carefully considered. The intention may be to help, but the impact must be what truly matters.