Dr Andrew Robert Watson: Scotland’s private rented sector - the next 30 years

In my recent report, The changing characteristics and motivations of Scottish private rented sector landlords and their investments – 30 years of surveys, I looked back over thirty years of landlord surveys in the Scottish PRS. The report found that over the period the SPRS has become increasingly cottage-like, dominated by large numbers of small-portfolio part-time landlords.

While the personal characteristics of these landlords have remained relatively unchanged, their motivations have become increasingly investment-focused with more now seeking rental income, capital growth, or both.  

This blog builds on the report by looking at the likely trajectory for the sector over the next 30 years. There are four emergent trends: the legislative burden continues to increase, the PRS investment case has weakened, anti-landlord rhetoric has spread, and landlords are leaving the sector.  

Legislative changes

The pace of legislative change has been brisk for some time, but over the last five years it has quickened. The introduction of the temporary ‘eviction ban’ and ‘rent cap’ during the pandemic, and the recent enactment of the Housing (Scotland) Act 2025, are examples of major interventions. 

Investment

The investment case has also weakened, with landlords now feeling the effect of the earlier loss of mortgage-interest relief, recent increases to the Additional Dwelling Supplement (ADS), and rising mortgage, compliance and operational costs.

With inflation still elevated and minimum energy-efficiency standards in the legislative pipeline, the cost burden will continue to grow. However, the ability to increase rents further to offset these costs is limited by what some markets can sustain and the spectre of rent controls. 

Anti-landlord rhetoric

There has also been heightened rhetoric, with ideological critiques of landlordism from some MSPs, and some commentators positioning the PRS as a foil when seeking preferential policy treatment for alternative providers. In this context, it is little wonder that landlords are leaving the sector.  

Decline in landlord numbers

While landlord numbers have been dwindling for some time, between December 2020 and December 2025 the number of active landlord registrations dropped by 5.3%. While some properties will be lost to the sector, a marginal increase in average portfolio size from 1.4 to 1.5 over the same period suggests that some are being bought by existing landlords, although recent BTR and MMR registrations may also have contributed.

Landlords are leaving the sector for a variety of reasons, some have reached their investment objectives, some are simply ageing out, and some are attracted by better returns with less hassle elsewhere. However, a significant proportion are fatigued by the cumulative impact of legislation, reduced investment viability, and adversarial rhetoric.

Furthermore, anecdotal evidence suggests that these factors are also reducing the volume of new entrants, particularly circumstantial landlords.  

The next 30 years?

With all of this in mind, what will change over the next 30 years? All things being equal, the number of registered landlords will continue to fall, and property numbers will eventually follow.

However, the fundamental mismatch between supply and demand, driven by demographics, the continuing failure to build sufficient homes, and the enduring nature of the housing emergency, will ensure that strong demand persists. This will drive a moderate increase in BTR delivery, some small growth in the portfolios of established landlords, and may also encourage new entrants unencumbered by recent history.

As a result, the decline is likely to be gradual in the short to mid-term. The long-term outcome (2055) will be determined, in part, by the future direction of policy. Based on the current trajectory, that outlook would be pessimistic. However, it is not beyond policymakers to simultaneously encourage institutional investment in the sector and support existing small-scale landlords. 

• This article was originally published on the UK Collaborative Centre for Housing Evidence (CaCHE) website.