The damage may have already been done to Scotland’s home rental sector with £2.5 billion in housing investment set to go south.
While the SNP and Green administration rent cap policy had the best of intentions for tenants, it could have stymied the development of thousands of homes and in the long run exacerbate housing pressures.
It comes amid an increase in the popularity of private rented homes.
The Scottish Property Federation, which represents the views of real estate industry businesses and professionals, said: "There have been many unintended consequences of the legislation on build to rent in Scotland.
"We estimated that in September 2022, £700m worth of build to rent schemes were put on hold at the onset of the decision, which risks deepening the housing shortage.
"Subsequent reports estimate some £2.5bn of sorely needed investment might be at risk if we regulate poorly for this emerging sector.
"The nature in which the emergency legislation was enforced without evidence-based data or engagement with the sector has contributed to a loss of confidence in the investor community with the Scottish Government."
READ MORE: Homes shelved as direct result of SNP, Green rent curbs
David Melhuish, SPF director, told The Herald: "The transitional provisions are a step in the right direction in terms of re-setting the rental market in Scotland. We fear much damage has been done in terms of both smaller private rented sector landlords exiting the market and a loss of confidence by large-scale investors in new rental housing.
"It is vital the Scottish Government restores investor confidence in its upcoming Housing Bill which will include proposals for a permanent system of rent controls across Scotland.
"There is still some £2.5bn of new investment and a total pipeline of some 17,000 modern rental homes of all types of tenure that could still happen in the next few years if the government provides the right platform for investment.
"If it does not then we fear this investment will continue to go outside of Scotland."
READ MORE: Student housing at site previously earmarked for homes gets green light
Patrick Harvie, Green MSP and Tenants’ Rights Minister, responded: "International experience shows that regulation of private renting can go hand in hand with healthy markets, with good supply and sustained investment.
"We have been developing the Housing Bill to deliver a New Deal for Tenants, including the introduction of long-term rent controls for the private rented sector, creating new tenants’ rights. We have welcomed views from and will continue to engage with tenants, landlords and investors in the bill’s development."
He also said the number of properties for rent has risen by 1.5% since the cap.
It comes as the Scottish Government was also under fire for confirming an end to the rent rise curbs intended to ease the cost of living crisis, with campaigners criticising the move.
Also this week, business editor Ian McConnell identifies someone who is "more than a bit frustrated at the lack of debate within Labour about its policy on Brexit".
Business correspondent Kristy Dorsey writes that, as Storm Isha was coming to an end, "the economic insanity of failing to plan and invest in long-term energy security" was laid bare.
Elsewhere, deputy business editor Scott Wright opines that "the controversial decision of Marks & Spencer to close its long-established store on Aberdeen’s St Nicholas Street has returned one of the most pressing issues facing modern Scotland to the agenda".
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