A New Dawn For Scottish Build to Rent – Bidwells 2025 Scottish Build to Rent Investment Report
A new chapter is unfolding for the Scottish Build to Rent (BTR) market, with National and devolved government policy, rather than market dynamics alone, likely to dictate the flow of capital into this sector, according to Bidwells’ latest Scottish Build to Rent Investment Report.
The UK’s BTR sector is on track for another record-breaking year for investment in 2025, with £3bn invested up to Q3, which is up 35% year-on-year. “However, a tale of two trajectories is emerging within UK BTR. While the underlying market fundamentals of strong tenant demand and demographics remain robust, the primary driver of future returns is now the sharply diverging legislative and regulatory philosophies in Scotland and England,” says Iain Murray, Bidwells’ head of operational living.
Iain continues: “Against this backdrop, Scotland is actively pursuing a path of pragmatic, pro-investment exemptions designed to stimulate supply. England, conversely, is implementing a suite of broad, often overlapping regulations that are creating significant viability challenges, operational uncertainty, and additional costs for developers and operators.”
The passage of the Housing Bill by the Scottish Parliament has marked a watershed moment for the nation’s rental market. The Housing Bill intends to introduce a permanent rent regulation system with clear, CPI-linked caps, and crucially exempts BTR and Mid-Market Rent (MMR) sectors. This decision, shaped through industry consultation, removes the primary barrier to investment and signals strong government partnership with institutional capital. It delivers a politically durable settlement that balances tenant rights with housing supply.
The most significant provision within Scotland’s new intended legislative framework is the government’s clear and pragmatic decision to exempt the Build to Rent and Mid-Market Rent sectors from the new rent control mechanism. Iain adds: “This represents a deliberate and strategic policy choice, signalling to global investors that the Scottish government understands the distinct BTR business model and is a proactive partner in delivering new, high-quality rental housing. The approach balances political pressure for tenant protection within the traditional private rented sector while creating a stable, secure environment for institutional investment—a framework that offers long-term predictability often more valuable than a deregulated but politically uncertain market.”
In contrast, while Scotland moves towards legislative clarity, England is instigating regulation, suggest as the Building Safety Act 2022 and the Renters Reform Bill, which is increasing the cost and complexity of delivering BTR.
Previously, Scotland’s BTR delivery has been strangled by Rent Control, falling to its lowest level for four years in 2025 at just 4.3% of the whole of the UK’s BTR delivery during that time, despite accounting for 11.4% of BTR’s core demand UK-wide.
Regulatory uncertainty between 2022 and 2025 froze Scotland’s BTR pipeline, cutting investment volumes by 67% and construction by 26%. Even Scotland’s BTR pipeline of 11,587 BTR homes is vastly disproportionate to the scale of Scotland’s cities and market opportunities.
With rent regulation now potentially clarified, the market is primed for rapid recovery. The proposed new legislative clarity could immediately unlock a substantial pipeline of stalled BTR projects. According to Bidwells’ BTR Database, nearly 8,300 units are consented but frozen due to regulatory uncertainty. These 8,300 homes represent an immediate opportunity to capitalise on Scotland’s new pro-Build to Rent environment.
Iain concludes: “This legislative certainty has de-risked BTR investment, positioning Scotland as one of the UK’s most stable and predictable rental markets. This certainty and stability is the new dawn for Scotland, creating an exciting foundation for growth.”