By Ryan Blair, Managing Director, Highlight Housing
Reforming Scotland’s Housing System
The Housing (Scotland) Bill, introduced to the Scottish Parliament in March 2024, represents one of the most significant efforts in recent years to reform housing legislation in Scotland. Its core ambition is to improve the private and social rented sectors, enhance tenant rights, and place greater emphasis on the prevention of homelessness. It also forms a central pillar in the Scottish Government’s wider housing strategy, aligning closely with the long-term goals set out in Housing to 2040.
Among its key proposals are the introduction of rent control powers for local authorities, clearer rights for tenants to make reasonable property modifications or keep pets, and changes to eviction processes to ensure greater fairness. It also includes new duties for public bodies to act early in preventing homelessness, and reforms to the legal framework around joint tenancies and tenancy conversions.
As the Bill progresses through Parliament, proposed amendments have sought to fine-tune these measures. These include a potential rent cap set at CPI plus one percent, capped at six percent annually, and discussions around possible exemptions to ensure viability in specific circumstances. These developments reflect an ongoing effort to balance tenant protection with the practical realities of housing delivery and investment.
However, while the Bill is rightly focused on strengthening the rented sector and improving outcomes for people at risk of homelessness, one notable omission remains: the absence of measures to support low-cost homeownership.
Alignment with Housing to 2040
These reforms align with the Scottish Government’s Housing to 2040 strategy, a long-term plan to create a housing system that provides everyone with a home that is affordable, accessible, and meets their needs. Among its priorities are improving housing quality across all tenures, increasing the supply of affordable homes, and creating connected communities through a place-based approach.
The Housing (Scotland) Bill directly supports many of these aims, particularly in improving tenant wellbeing, tackling fuel poverty, and preventing homelessness. However, for the broader vision of Housing to 2040 to be fully realised, support for homeownership – especially for those priced out of the open market – also needs to form part of the legislative agenda.
The Missing Link: Low-Cost Homeownership
While the Housing (Scotland) Bill rightly focuses on improving outcomes for renters and people at risk of homelessness, it lacks any direct reference to homeownership for those on low to moderate incomes. This is a critical part of the housing mix if we are to create inclusive, balanced communities.
The Limits of the LIFT Scheme
Currently, the Scottish Government’s LIFT scheme (Low-cost Initiative for First-Time Buyers) is one of the few routes into ownership for those priced out of the open market. However, its availability is limited, with funding often capped and supply dependent on local stock. As demand for more affordable and secure routes into ownership grows, we should be looking at ways to scale and modernise this offer.
A Case for a Scottish Shared Ownership Model
In England, shared ownership has long been used as a tool to bridge the affordability gap. While not without its criticisms, there are valuable lessons to be taken from its evolution, including the importance of transparent cost structures, long-term affordability, and robust management standards.
A Scottish version of shared ownership, tailored to our unique legislative and policy environment, could offer another viable route for individuals and families seeking stability without needing to stretch to full ownership. It could sit alongside existing affordable housing and mid-market rent products as part of a broader strategy to increase tenure choice and help people progress through housing in a way that suits their circumstances.
Exploring Rent to Buy as a Transitional Option
Another option that deserves more attention in the Scottish context is Rent to Buy. This model allows tenants to rent a home at a reduced rate while working towards purchasing it after a fixed period. It is a flexible, supportive tenure that can help individuals gradually transition into ownership – particularly those who may not yet be mortgage-ready.
Rent to Buy can serve as a practical stepping stone for working households, key workers, and young families who are often stuck between unaffordable rents and inaccessible mortgages. With proper regulation and support, it can also provide stability for landlords and developers by ensuring occupancy and building future demand for ownership.
Although underutilised in Scotland, Rent to Buy has shown potential in other parts of the UK. A refreshed Scottish model, designed with clarity, fairness and long-term value in mind, could strengthen housing pathways and broaden tenure options across the country.
Balancing Regulation and Investment Confidence
As a sector, we also need to be mindful of maintaining investor confidence, particularly in the Build to Rent (BTR) and mid-market rent sectors, both of which have proven popular in Scotland and continue to attract private investment into areas of significant housing need.
The proposed rent cap amendments, such as setting limits at CPI plus one percent with a six percent ceiling, show promise in creating stability for tenants while offering a more predictable framework for institutional investors. Continued consultation and collaboration with the market will be key to getting this balance right.
As we’ve already seen, uncertainty over rent controls has stalled around 14,000 BTR homes across Scotland. Clear, fair regulation that supports long-term tenancies while still making new schemes viable is essential if we are to unlock the housing supply we so urgently need.
A More Inclusive Housing System
Scotland needs homes for renters, for homeowners, for families in crisis, and for people ready to take their next step. The Housing to 2040 strategy rightly acknowledges that no single solution will fix our housing system. It requires a coordinated, long-term effort with diverse delivery routes and tenures working together.
The Housing (Scotland) Bill represents a critical part of that puzzle, but we must now go further. Expanding low-cost homeownership options, strengthening the role of mid-market rent, introducing Rent to Buy, and enabling Build to Rent schemes to thrive responsibly must all be part of the conversation as the Bill progresses through Parliament.
Looking Ahead
At Highlight Housing, we are committed to supporting a housing system that works for everyone, including tenants, landlords, investors and communities. We support the intent behind the Housing (Scotland) Bill and the protections it seeks to embed, but we also believe the time is right to introduce new routes into ownership that are accessible, sustainable, and work alongside rental products to offer real choice.
As the Bill moves through Stage 2 and further amendments are considered, we hope to see this broader vision reflected – not just in principle, but in practice.