We’ve all become much more accustomed to the idea of special measures being implemented. We hear it in news reports about under performing schools, train operators and health boards & trusts.

There’s always a risk of familiarity breeding contempt.  In this case, we can forget the very uniqueness of special measures being put in place. The clue is in the name; it should be unusual, abnormal, a last resort!

The Scottish Government’s emergency rent control measures should fall into this category.

When they were introduced in 2022 at the height of the cost-of-living crisis, they had a very specific purpose and rationale. There was a period of significant economic uncertainty, Government felt compelled to act to prevent an unprecedented rise in rent arrears and evictions.

Clearly this is an over-simplification; however there were a number of key metrics and at the time, in the circumstances, the government felt that their legislation Cost of Living (Tenant Protection) (Scotland) Act 2022 was the best way to meet these specific challenges.

There are many who disagree, who believe there was a different agenda being pursued in parallel. Whilst I’m not in a position to shed any further light on that, what I can explore is the impacts on the housing and development industry as a result of the Act.

Development became more challenging, long-term funding was more difficult to get as the financial models around return on investment became more difficult to satisfy. Large-scale institutional investors - predominantly pension funds - were unable to secure a return that met their financial models and simply withdrew from projects.

Before we criticise these funds for looking for a return on their investment, let’s remember that they need to generate a return to see growth, which is what allows the value of our pensions to increase.

This didn’t just impact expensive private housing. Social housing projects became more difficult to fund. Rising interest rates combined with capped rental increases stopped developments as finance wasn’t available. Projects that were affordable one week were not the next.

This is clearly not all about rent caps; inflation, material costs, labour costs, and interest rates all contributed. The challenge is that the rent caps were new and unknown. They changed the regulatory framework and changed the investment models. They took away even the potential of future rental increases and, therefore, return on investment for funders.

The unfortunate irony is that the very mechanism put in place to protect people from the cost of living from unaffordable increases in rental reduced the housing stock and made finding properties more difficult.

Now, the Act had a purpose and was developed to address very specific factors. The problem is that it also had a number of, hopefully, unintended consequences and Governments are not always quick to recognise or respond, and often even less so to accept.

The original temporary measures have now ceased; however there is a new Housing Bill which will impact the market going forward. The real challenge is how do we make our housing industry attractive again.

The money diverted from those projects when the initial legislation was enacted has been spent, it has been diverted to other projects and often in other areas - especially in Manchester, Birmingham and Leeds. Our challenge, as an industry, a government and a nation, is to make investment in Scotland attractive again by providing certainty, consistency and opportunity.