Key Legal Developments in Scottish Housing and Land Reform

The landscape of Scottish Housing and Land Reform is undergoing significant changes, with several key legislative proposals and reforms on the horizon. These developments are poised to impact various sectors including build to rent (BTR), purpose-built student accommodation (PBSA), residential developments, commercial leasing and land transactions. Below, we have compiled a list of the most critical aspects of these changes:

Legislation not yet in Force

Building Safety Levy: The implementation of the Building Safety Levy is expected to apply to all new residential developments, including BTR and PBSA. This will apply to all new forming a residential development with some exemptions including for social and affordable housing.  It is proposed to be charged on proportion of floor space and will be collected by Revenue Scotland, being due at the point of issue of completion certificate.  This is projected to raise over £30m annually towards Scotland's Cladding Remediation Programme.  The Scottish Government intend this to come into effect on 1 April 2027¹ running behind similar provisions in England and Wales due in Autumn 2026.  There are outstanding key questions about thresholds of exemptions for SMEs and some serious concerns about how hard it will hit both the BTR and PBSA sectors as a result of these property types (a) including more communal spaces thereby adding to proportion of floor space; and (b) consisting of multiple units all being covered by 1 completion certificate resulting in large tax payments being due in one hit which is in contrast to typical new build developments where the payments are in multiple, smaller chunks.  

Housing (Scotland) Bill: This bill includes a rent control cap and Awaab’s Law, which addresses issues related to damp and mould in housing. These measures aim to improve living conditions and protect tenants' rights.  There has been much debate about the basis of the rent control cap but there seems a broad cross-party consensus on 1% plus CPI, capped at 6%.  The rent control cap will only apply where the local authority is a designated rent control area and it will take a little time for the 32 local authorities in Scotland to report to the Scottish Ministers and make recommendations as to whether or not they should be so designated.  It is worth noting that there is already scope for Local Authorities to be deemed Rent Pressure Zones under the Private Housing (Tenancies) (Scotland) Act 2016 and have this same rent cap applied but no Local Authorities applied for this designation.  

During Stage 2 of the Bill there was a Scottish Conservative Party amendment to include student tenancies i.e. university owned halls and PBSA within the remit of the Bill, these types of tenancies falling outside of the private residential tenancy regime.  The amendment was passed with cross-party support from a Green MSP and a Labour MSP.  As well as the rent cap, the amended 3 Bill now includes an ability for students to terminate these types of tenancies with a 28-day notice period.  This has understandably caused concern among developers and potential for stalling investment in this sector who consider the unique timetable of term-time accommodation provision deserving of different rules.  They also make the point that as providers they play a key role in relieving pressure on the wider rented sector.  The Scottish Government however has expressed that it does not support the inclusion of student residential tenancies within the rent control aspects of the Bill and in doing so has created an expectation that these provisions will be removed during the Stage 3 process.  The Scottish Government has however supported the termination provisions in specific circumstances in line with current industry best practice.  It is consulting more widely on PBSA and the possibility of a model student residential tenancy and expects to progress that separately to the Housing (Scotland) Bill. 

There is a further popular provision within Part 3 of the amended bill which allows tenants the opportunity to request to keep a pet and requires landlord's consent not to be unreasonably refused.

Renters’ Rights Bill: Although not wholly applicable to Scotland, as no-fault evictions ended here in December 2017, an important element of this bill will apply north of the border. Following implementation, landlords will not be able to discriminate against prospective tenants in receipt of benefits or those with children. This includes indirect practices such as requiring higher deposits or advance rental payments from these categories of applicants.  The right to request to keep a pet will not be introduced in Scotland as this will be introduced via the Housing (Scotland) bill.  

Heat in Buildings Bill: is expected to be introduced before the end of 2025 and will mirror English & Welsh legislation.  This has been controversial and has been put on and off the table by the Scottish Government.  It will introduce a new EPC framework and introduce Minimum Energy Efficiency Standards (MEES) for the private rented sector to reach an equivalent EPC rating of C. The timetable is that these minimum standards will apply to all new tenancies by 2028 and to all tenancies by the end of 2033.  Understandably, there are concerns about the affordability and practicality of energy upgrades and it will be interesting to see how the Scottish Government addresses these and what concessions will be tabled for rural and traditional properties that are inherently difficult to retrofit for energy efficiency.

Leases (Automatic Continuation etc) Bill: With the initial consultation now closed, the timeframe for implementing this shake-up of Scottish commercial leasing is under scrutiny and expected to emerge from Stage 1 around 19 September 2025. This bill is expected to continue its way through the Scottish parliament with pace.  The Scottish Government may take the opportunity to add to the bill the abolition of the Tenancy of Shops (Scotland) Act 1949, as recommended by the Scottish Law Commission.  It is hoped however that they do not follow in the steps of England & Wales and ambush practitioners with a sudden ban on upwards only rent reviews for commercial leases.  

Land Reform (Scotland) Bill: This transformative regime aims to change the way Scottish land is transacted on and break down the concentration of land ownership. There are proposed sweeping changes to large landholdings (those exceeding 1,000 hectares or 2,471 acres) restricting the ways in which they can be sold introducing a lotting procedure and enhancing the right to buy for community bodies.  For agricultural leasing there will be a new code of practice focusing on sustainable and regenerative farming and reforms for rent review based on productive capacity, an alternative dispute resolution process for rent and changes for compensation for resumption.  There is a focus on community engagement and the right to buy, further reforming agricultural holdings.  There will be a requirement for all large landholdings to have Land Management Plans publicly available which must include details of:

1. Details of the land including how its ownership is structured; 

2. Long-term objectives for land management including any potential sales; 

3. Details of engagement with communities in relation to the plan;

4. How the owner complies with (or intends to comply with) the community engagement aspects of the bill, the Scottish Outdoor Access Code and the Code of Practice on Deer Management; and;

5. Details of how the owner is managing (or intends to manage the land) to contribute towards net zero emissions target, adapting to climate change and increasing or sustaining biodiversity.

These plans will need updating every 5 years and Landowners will need to engage with tenants and communities on the development of and changes to the Land Management Plan.

The bill has faced heavy criticism from every angle, receiving a staggering 122 responses during the first consultation². The Bill has made it into Stage 3, and the question now is how the Scottish Government will respond to these criticisms and just how heavily the next version of the bill will be revised.

The Natural Environment (Scotland) Bill: sets legally binding targets for nature restoration aiming to tackle species loss and habitat degradation.  For Landowners, it also reforms deer management and aims to improve the management of National Parks by e.g. introducing fines for breaches of byelaws.

Legislation in Force now

Wildlife Management and Muirburn (Scotland) Act 2024: introduces a code of conduct and a requirement for owners of Grouse Moors to apply for licences for specific traps and muirburn meaning that unlicenced muirburn will be a criminal offence.  Also conferring greater powers on the SSPCA and putting place further restrictions on the killing (or taking) of certain birds, it continues with the themes of sustainable management and preservation of Scotland's environment and wildlife.

Agriculture and Rural Communities (Scotland) Act 2024: sets in motion changes to the funding basis for farmers including replacement of the Basic Payment Scheme (BPS) with the rural support plan providing more comprehensive and flexible support system for farmers. Those involved in agriculture (including farmers, crofters and land managers) will require to undertake CPD. It will also give the Scottish Ministers powers to vary the Common Agricultural Policy (CAP) legislation to allow more tailored and responsive agricultural policies aiming to stabilise prices and support farmers during challenging times. 

Concluding Comments

Combined these legislative changes reflect a broader effort to enhance tenant protections, improve housing standards, and modernise land transactions in Scotland. Stakeholders in the housing and land sectors should stay informed about these developments to navigate the evolving legal landscape effectively.  If you would like to discuss how current or future legislation will impact on you, please contact Elaine Kennedy-Walton - Burges Salmon (Professional Support Lawyer), Ross Simpson - Burges Salmon (Rural Land and Natural Capital), Robert Forman - Burges Salmon (Built Environment) or Claire Logue - Burges Salmon (Construction & Engineering). 

1. Scottish Building Safety Levy: consultation analysis report - gov.scot 
2. 122 responders gave authority for their responses to be published.  It is suspected there will be many more who responded but did not give permission.