New legislation on private housing tenancies is likely to lead to a major rethink by landlords on continuing to let properties, Scottish Land & Estates has warned.

The organisation, which represents suppliers of rural housing across Scotland, said that the passing of the Private Housing (Tenancies) (Scotland) Bill by the Scottish Parliament last week had left promises to strike a balance of rights between tenants and landlords “ringing hollow”.

Katy Dickson, policy officer (business & property) at Scottish Land & Estates, said: “We have witnessed a real missed opportunity to create a tenancy which not only closes the opportunity for unscrupulous evictions but also incentivises lawful landlords to continue to offer tenants quality homes at affordable rents.

“In the programme for government, the First Minister promised to give ‘tenants in the private rented sector increased security, while giving landlords, lenders and investors the confidence to continue investing in the sector.’ Sadly, many in the sector now believe those words now ring hollow.

“The Bill as introduced at Stage One, whilst not perfect, was close to a reasonable balance for all parties. Yet at Stages Two and Three, a flood of amendments were lodged and representatives - who said they understood rural issues and had been engaging with landlords – were no longer so cognisant of their concerns.

“That now leaves us in the position of having one side of the equation – security for tenants – met, and leaving the other side – safeguards for landlords – disregarded.”

Scottish Land & Estates also said that the new legislation may lead to a host of unintended consequences.

Katy added: “There also continues to be no ground to repossess a property if it is required for a new employee, putting both the availability of homes for workers at risk as well as rural business development.

“There has been a complete failure to listen to rural stakeholders about concerns regarding property required for a growing workforce or how properties within agricultural tenancies can be legally let. The consequences will be a decrease in the supply of rural housing, much of which is let an affordable level, and the creation of a barrier to furthering rural economic development.

“We now look to the formation of secondary legislation before the new tenancy is introduced in late 2017. We will work with the housing minister in the next parliamentary session and aim to help them form the regulation and minimise the damaging impact of this rushed Bill on both rural businesses and the private rental sector in general.”

David Cox, managing director, Association of Residential Letting Agents (ARLA) said he welcomed the concept of the tenancy reform in Scotland but the legislation “has gone too far”.

He added: “Scrapping the ‘No Fault’ possession of Section 33, watering down the mandatory grounds for possession, removing initial terms and implementing rent control through ‘Rent Pressure Zones’ will damage Scotland’s private rented sector. In turn, this will make Scotland a less attractive place for landlords to own rental portfolios and decrease investment in the sector at a time when more private rented properties are needed than ever before.

“The main discussion from the recent SNP conference was the overwhelming support there has been for rent controls. If Scotland applies rent controls it will have a detrimental effect on the sector – landlords would have to make cuts elsewhere to account for the decrease in rental income. This would result in lower quality properties due to the amount of maintenance decreasing and will eventually result in landlords selling their properties, or stop investment in buy-to-let properties altogether.”