Scottish landlords have, on the whole, adapted to the post-2016 regime, but their behavior and future investment plans are influenced by the profitability and predictability of the market. Landlord surveys indicate that after a few years of PRT in practice, most landlords were no less likely to continue renting out their property because of the reforms. In fact, one multi-year panel survey found no evidence of a higher dropout rate of landlords in Scotland relative to trends elsewhere – the number of registered landlords remained high.
The RentBetter project reported that the “vast majority” of private landlords have accepted the new system, with many finding the outcome not as onerous as feared(19). They appreciate, for instance, that the law still allows eviction for genuine reasons like selling or moving in (providing an exit strategy when needed), and that they can still remove tenants for non-payment or bad conduct (though it now requires tribunal action rather than a simple notice).
The average tenancy lengths have increased under PRT, which can mean more stable rental income for landlords if they have good tenants. Indeed, about 80% of Scottish tenants in one survey felt confident they could stay as long as they wanted(19) which implies landlords are not routinely churning their tenancies.
That said, the prospect of tighter rent controls has stirred concern in the landlord community. The emergency rent freeze of 2022 was a wake-up call: some landlords with slim margins (for example, those facing rising mortgage rates) complained that they were squeezed by not being able to raise rent at least in line with costs. Organisations like the National Residential Landlords Association (NRLA) and Propertymark have warned that imposing long-term rent control could disincentivise investment and maintenance (9). They argue that if landlords expect below-market returns, some will exit, worsening the housing shortage. The Scottish Government’s own analysis acknowledges a risk of unintended consequences if policies are not balanced – for instance, a regulatory change that is too strict could prompt landlords to sell into the owner-occupied market, reducing PRS supply(19). So far, any such effect appears limited: the PRS is slightly smaller as a share of housing than a few years ago (14% down to ~13%), but in absolute terms the number of PRS homes is near its peak (13).
Institutional investment (large-scale corporate landlords) in Scotland’s PRS remains low, partly because of the market’s size and perhaps wariness of regulatory shifts. Build-to-rent developments have been slower to take off in Scotland than in some English cities, though interest is emerging slowly. This means the Scottish rental market is still dominated by small landlords who may be more sensitive to policy changes. Many of these landlords are individuals balancing rental income against other costs; for them, measures like the loss of no-fault eviction or temporary rent caps are significant but not necessarily deal-breakers if their property continues to appreciate and find tenants. Indeed, the capital value of rental properties (tied to the general housing market) has risen over time, providing landlords with asset growth even if rental yields face some constraints.
In terms of property investment patterns, one outcome of greater tenant security is that rentals behave a bit more like long-term housing rather than short-term leases. Some landlords have adjusted by planning for longer holding periods of their investment, since rapid “flipping” of tenants or frequent rent hikes are less feasible. Others have used the grounds in the law to exit: for example, selling a property with vacant possession by using the eviction ground for sale.
New investment is still coming in – for instance, landlords continue to register new rental properties each year, especially in high-demand areas. But compared to pre-2016, prospective landlords now must accept a more regulated environment in Scotland. This might slow the entry of purely speculative landlords, while attracting those prepared for a stable, long-term rental business. Tenant outcomes, from a consumer perspective, have improved in terms of security: the rate of homelessness applications from private tenants fell in Scotland after the reforms, narrowing the gap between PRS and social tenants’ housing stability (11). This suggests fewer people are being evicted into homelessness, a positive social impact.
From a broader market view, Scotland’s case illustrates that tenant-friendly laws can coexist with a healthy rental market, though they are not an easy answer for issues like affordability or housing supply. Rental supply has been influenced by many factors beyond tenancy law (e.g. tax changes, economic cycles, and Covid-19 impacts on the student and urban rental markets). Disentangling those effects is complex. As of 2024, there is vigorous debate in Scotland about the next steps – how far to go with rent control, how to encourage continued investment, and how to increase affordable housing options.
The Scottish Government has signaled that future policy will be evidence-led and will include regular reporting on the rental sector (9). England, in rolling out its Renters’ Rights Bill, is surely watching Scotland’s experience. So far, the evidence from Scotland offers reassurance that giving tenants more rights (ending no-fault evictions, limiting rent increases, regulating agents) did not crash the market: tenants gained security and confidence (with 80% confident they can stay as long as they wish (19) and landlords largely continued their businesses (with most finding the new system reasonable (19)). At the same time, Scotland’s challenges – tenants often unaware of their rights, many not seeking redress for substandard conditions, and rents rising due to housing- show that legislation alone isn’t enough. It requires effective enforcement and broader housing strategy to truly “fix” the renting sectors.