Scottish Government laid the regulations to to exempt Mid-Market and Build-to-Rent properties from the rent control restrictions set out in the Housing Act on January 29th. SFHA has worked with the Scottish Government’s Rent Control Team and our MMR Members Working Group to influence these exemptions in recent years, and we are pleased to see exemptions for MMR defined and progressing through the Parliamentary process. Thank you to all of our members who have contributed to this process.
The exemptions below reflect Scottish Government’s response to the sector’s concerns that the rent controls included in the Housing (Scotland) Act would/were affecting the attractiveness of Scotland as a place to invest in new homes for mid-market rent, which is an important contribution to affordable housing supply. The exemption acknowledges that mid-market rent properties already have contractual restrictions on rent increases and the new rent control legislation would create unnecessary complexity for providers and stifle investment, without offering further benefit to tenants.
The exemption laid yesterday intends to apply to MMR properties for which there is a restriction placed either directly or indirectly on the property landlord through public funding conditions. MMR funding can be provided to a registered social landlord who offers those properties for rent via a holding company or subsidiary company, and, importantly, the regulations laid include scope for third-party arrangements.
The exemptions
The exemption for Mid-Market rent properties will operate as follows:
(the exemptions for Build to Rent properties are included at the end of this article). Importantly, the regulations clarify that:
• The exemption applies to circumstances where the landlord has received financial support from the Scottish Government or a local authority, or where a person other than the landlord received financial support to provide mid-market rent properties.
• The exemption also applies where mid-market rent properties are provided by an organisation not in receipt of public funding, but where there is a similar restriction on the rent that can be charged.
• Where a property benefits from an exemption through being offered as mid-market rent, the rent cannot go above the median of market rents, as published on an annual basis by the Scottish Government.
Richard Meade SFHA CEO said:
“We’re in the midst of a housing emergency and the answer to that is to provide far, far, more affordable homes. We’re therefore pleased that our housing associations have been listened to and that Mid-Market Rent will not inadvertently fall under rent controls intended for the private sector.
“Our Mid-Market homes are an increasingly important part of the housing market, often housing key workers and young people who can’t afford private rented accommodation or access a social home.
“Importantly, they are already effectively rent-controlled by being tied to local housing allowance. Tenants of MMR properties, as well as being able to live in an affordable home, also enjoy all the benefits of living in a social home often managed by housing associations. That should be protected, not put under threat. Everyone should have access to a safe, warm affordable home, because we know that allows people and Scotland to thrive, and MMR plays a crucial role in helping us to achieve that vision. We are pleased that government listened and provided the certainty needed so that more people will have the chance to access MMR properties in the future.”
Next steps
Now that these regulations have been laid, they will be considered by the Local Government, Housing and Planning Committee. The committee has 54 days to scrutinise the SSI, before which the committee will report to Parliament with a recommendation on whether these regulations should be passed. Following the committee’s report to Parliament, there will be vote on whether to pass the Regulations into law. Should Parliament approve the Regulations they will be signed by the Cabinet Secretary and come into force on 1 April 2026.
An accompanying policy memo is available to download on the left of the article.
To discuss or share feedback, please contact Annabel at apidgeon@sfha.co.uk.