Scotland looks set to miss out on £4.5billion of housing investment over the next decade under the Scottish Government's plans to bring in permanent rent controls.

John Swinney - Scotland's new first minister - has been warned that his government's housing bill, as drafted, could also result in the country missing out on 17,000 construction jobs.

The warning from the Scottish Property Federation, which represents companies involved in private property ownership and investment, and follows pledges by Mr Swinney and his deputy Kate Forbes to refocus the administration's priorities on growing the economy and creating jobs.

The Housing (Scotland) Bill published in March will require local councils to carry out assessments on the condition of the private rental sector and make recommendations to ministers about imposing rent controls. It could also mean that rent rises may be capped during and between tenancies and make it harder for landlords to evict tenants.

Official figures from the Scottish Government published last month showed that private rents increased by more than 13% on average in the year up to September despite a 3% rent freeze applied to existing tenancies.

David Melhuish, director of the Scottish Property Federation, welcomed Mr Swinney's and Ms Forbes commitment to focus on the economy and urged them to turn their vision into "actions" on the ground.

"The new emphasis on the economy from John Swinney and Kate Forbes is most welcome but we need to see this vision translated into actions," he told The Herald.

"Our industry experts estimate that the Housing Bill as drafted risks the loss of over £4.5bn in GVA [Gross Value Added] for the Scottish economy over the next 10 years, including 17,000 jobs many of which would be for the hard pressed construction sector.

"This investment is real but frankly frozen due to the specific proposals on rent controls in the Bill which must be improved. This is an economic opportunity for Scotland as well as a housing necessity. It must not be lost."

He added: "Recent evidence from places like Scotland, Dublin, Berlin and New York is not positive, there forms of rent control have had unintended consequences.

"There is no solution to the housing crisis which doesn't begin with building more homes, supplying more homes."

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