A last-minute amendment to the Scottish Housing Bill was proposed by MSP Graham Simpson last week, and has now been accepted, leading previously exempt student accommodation to be included within the extent of the Bill. 

The Bill intends rent increases to be capped at CPI+1% per annum, with a cap at 6% total; not only during the term of a lease but also when a property is vacant; and as a result has been accused of damaging the future property development market in Scotland. This isn’t without basis. Since the Bill was proposed last year, recent letting stock in the country has slowed to almost a halt, with current schemes on pause, or in many situations, transformed into PBSA projects.  

Now that student accommodation may no longer be exempt, the previously flourishing PBSA sector could be subject to these rent restrictions, leaving investors extremely concerned for the future of their ongoing developments. 

With Mr Simpson’s amendment accepted, the Bill will progress to the final Stage 3 vote, which is expected to be held in the Scottish parliament towards the end of 2025. The amendment can be reversed, although this process is complex and mitigation or removal is quite unlikely. 

The impact of this is concerning and time will tell how it will play out in the Scottish property market.