The Housing (Scotland) Act 2025 has now completed its passage through Parliament and introduces several important developments across the housing sector. While much of the Act focuses on the private rented sector, several key amendments directly affecting the property factoring industry were debated, with two significant changes ultimately approved.
Key Changes Affecting Property Factoring
Although the Act is wide ranging, two amendments relating directly to property factoring will now become law:
Enhanced Regulatory Powers
The Property Factors (Scotland) Act 2011 will be strengthened to allow an “authorised person” to enter a property factor’s premises and review documents, data and records for the purpose of monitoring statutory compliance. Failing to co-operate with an inspection will become a criminal offence, marking a notable increase in regulatory oversight.
Easier Dismissal of Developer-Appointed Managers
Changes to the Title Conditions (Scotland) Act 2003 will make it easier for homeowners to replace a developer appointed first factor. Instead of the current requirement for a two thirds majority, homeowners will be able to dismiss the appointed manager with a simple majority vote. This is intended to provide more flexibility and responsiveness for new developments.
Proposals Considered but Not Supported
During the parliamentary debate, MSPs discussed a number of additional proposals aimed at increasing accountability and transparency within property factoring. These were not ultimately carried forward, but they provide useful insight into areas of political and public interest. Among the ideas debated were:
- A requirement for homeowners to maintain a communal building insurance policy
- Obligations on property factors to arrange and attend at least two homeowner meetings per year
- A rule that, unless otherwise stated in the title deeds, a change of factor could be approved by a simple majority of homeowners present at a meeting
- A minimum three month notice period for repairs or maintenance costing over £10,000, with such spending requiring majority approval at a homeowner meeting
- Mandatory three month notice from a factor intending to transfer its factoring contract
- The ability for a Property Factor Enforcement Order to require a factor to compensate a homeowner up to £10,000
- While these proposals did not progress, their discussion reflects growing scrutiny of the factoring sector and increasing pressure to strengthen consumer protections.
Renewed Interest in Property Factoring Regulation
Debate in Parliament highlighted significant interest in the operation of property factors and the experiences of homeowners across Scotland. Many MSPs noted the volume of constituent concerns around factoring, signalling that this is an area likely to receive ongoing attention.
In response, the Scottish Government committed to accelerating a full review of the Property Factors Code of Conduct. This review will examine:
- How well the current Code is understood and followed
- The effectiveness of fit and proper assessments
- Whether revised or additional minimum standards are required
- The Government indicated that many of the concerns raised during the Bill process may be addressed through an updated Code rather than primary legislation.
Upcoming Review of the Code of Conduct
With a refreshed Code expected, the factoring industry will need to consider several questions, including:
- What changes would provide meaningful improvements for homeowners
- Whether the existing Code goes far enough, or too far, in certain areas
- How the future establishment of Owners Associations may shape factoring operations
Whether formal professional qualifications should become a requirement for factoring staff
This review presents an opportunity for the sector to help shape a more robust and consistent regulatory environment.
Compulsory Owners Associations – Next Steps
The Scottish Law Commission continues to develop proposals for compulsory Owners Associations, supported by research into mandatory building inspections and reserve funds. A report, draft bill and public consultation are expected soon
This work is increasingly urgent as ageing tenement buildings continue to face structural risks. Another recent tenement collapse in the West of Scotland highlights the need for clearer maintenance obligations and collective decision-making structures within shared buildings.
Update on Scottish Housing Policy – Housing (Scotland) Act 2025 Now in Law
The Housing (Scotland) Act 2025 has now received Royal Assent, officially becoming law and marking one of the most significant changes to Scotland’s housing system in recent years. Although the Act is now in place, most of its provisions will be introduced gradually as the Scottish Government brings forward the necessary regulations and commencement orders.
The Act completed its passage through the Scottish Parliament on 30th September 2025 and received Royal Assent on 6th November 2025. At present, only Part 8 has come into force, with the remainder set to follow in stages. This means that while the direction of policy is now established, the practical impact will take time to unfold.
One of the most notable reforms is the introduction of Rent Control Areas, but these will not be implemented immediately. Local authorities are required to assess rental conditions in their areas and report to the Scottish Government by 31st May 2027. Only then can any Rent Control Areas be designated, meaning rent caps are unlikely to take effect until mid 2027 at the earliest.
The Act also introduces several new rights for tenants and new obligations for landlords, but these too will require further regulations before they become operational.
Future Tenant Protections (not yet in force)
- The right for tenants to request permission for pets
- The ability to request certain home modifications
- Updated rules around eviction protections and compensation
- Revised processes for ending joint tenancies
- Limits on the frequency of rent increases
Future Changes for Social Landlords
- New statutory duties to prevent homelessness
- Strengthened responsibilities to tackle dampness and mould
- Updated requirements for housing quality and repairs
What This Means Right Now
Although the Act is now legally in force, the majority of its reforms are not yet active. Most existing tenancy rules continue to apply, and day-to-day practice for landlords, tenants, letting agents and factors remains unchanged for the moment. Over the next few years, the Scottish Government will begin activating the various parts of the Act, meaning the sector is currently in a transitional phase. Greater clarity on implementation timelines is expected as commencement orders and regulations are published.
