New Report on Scotland's Private Rented Sector: Key Findings and Recommendations

Over the past five years, the research consultancy Indigo House has been carrying out an in-depth study of Scotland’s private rented sector (PRS). This independent research, funded by the charitable Nationwide Foundation, aimed to evaluate how legislative changes have affected both renters and landlords. The "Rent Better" project explored what has worked well, what hasn’t, and where further adjustments are needed to create safer, more secure homes, which are vital for a healthy and fulfilling life.

When the Nationwide Foundation initially pledged to support this research in 2019, they could not have foreseen the full extent of the challenges that would reshape the Scottish rental market in the following years. Factors such as the Covid-19 pandemic, the cost of living crisis, and additional government legislation—including emergency measures to cap rent increases—have had a significant impact.

With the final of three reports now released, here are some of the key findings:

• Changing market dynamics: Since 2017, the number of private rented homes in Scotland has declined, while the availability of social rented and privately owned homes has grown. This shift has resulted in a reduction of households living in the PRS, falling from 15% in 2017 to between 13% and 14% in 2022.
• Landlord satisfaction and concerns: While many landlords appreciate the stability brought by the Private Residential Tenancy (PRT) agreement, they are less satisfied with the pace of subsequent legislative changes. Rent control measures, in particular, are a source of frustration. Combined with market volatility, these factors have led to significant dissatisfaction among landlords, with many feeling less confident about the future of the sector. In 2024, just 17% of landlords reported confidence in the PRS's future sustainability, down from 41% in 2019. Additionally, a higher number of landlords now plan to exit the market compared to five years ago.
• Tenant experiences: On the tenant side, there is growing confidence in their ability to remain in their homes. Most tenants report being satisfied with their rental experience, though low-income renters and those in housing need are more likely to be dissatisfied. Additionally, there is concern that tenants may be accepting high rents as a norm, which could leave them in financial hardship.

The report also provided several recommendations for improving the sector:

• Stronger enforcement: There should be a greater emphasis on enforcing existing legislation, particularly at the lower end of the market, where tenants often have fewer options and less power to address issues.
• Increased affordable housing: The Scottish Government is encouraged to invest more in affordable housing, including social and Mid-Market Rent properties. Additionally, resources should be directed toward purchasing PRS properties for use as affordable housing by housing associations.
• Improved dispute resolution: The First Tier Tribunal system should be expanded and simplified, making it easier for both tenants and landlords to seek formal resolution when necessary.
• Clarify the PRS’s role: With the potential decline in PRS supply, the Scottish Government should review its strategy and clarify the sector's role in the wider housing system.
• Careful consideration of rent control: If rent controls are to be introduced, they must be designed with caution to avoid unintended consequences, such as driving up rents or reducing supply. A key first step would be establishing a system for collecting ongoing, reliable rent data.

Thank you the Scottish Association of Landlords (SAL) who carried out this research. To learn more about the study and its findings, click here.