TSB has refused to sell insurance to Scottish landlords, The National can reveal – over a Holyrood law change introduced last month.

The high street bank offers insurance for rental properties across the UK, but says a revamp of tenancy rules mean it can no longer cover landlords in Scotland.

This newspaper can reveal the policy change today after a reader was blocked by the firm.

The woman, who asked not to be named, approached TSB for cover for her Dundee property. Staff blamed the decision on the Private Residential Tenancy (PRT) introduced in December, comparing the new rules to other grounds for refusal like bankruptcy or possession of an anti-social behaviour order.

Billed as “the biggest change to the private rental sector in a generation”, PRT sees tenancies continue on a monthly rolling basis to give tenants “more security and stability” and landlords “better safeguards”.

While the deals have no end date, they can be terminated when tenants give written notice to property owners, who can order evictions using one of 18 grounds.

Publicising the change, which is supported by housing charity Shelter Scotland and the Scottish Association of Landlords, Housing Minister Kevin Stewart promised “significant improvements” for all involved.

But TSB, which is underwritten by Aviva, says the lack of an end date means it will not make new Scottish agreements. The bank said: “Our usual criteria for providing cover on let properties is that there is at least a six month tenancy agreement in place. Following the introduction of new legislation in December 2017, whereby Scottish landlords are no longer able to arrange a fixed period tenancy agreement, we are in the process of reviewing our acceptance criteria for home insurance for landlords.

“Unfortunately this means we are not able to offer new policies for landlords with Scottish properties at the present time, but we are working to resolve this matter as soon as possible.

"We would like to reassure any customers who already have TSB landlord insurance in place for properties in Scotland that policies will continue and claims will be honoured under these policies, regardless of the length of any tenancy agreements.”

More than 760,000 households live in private rental accommodation. The 2016 Scottish Household Survey Annual Report found most in such tenancies had lived there for 2.8 years.

The Dundee landlord was also initially knocked back by Saga, before it agreed to give coverage. A spokesperson for the firm said staff had given the wrong information and would be retrained.

The landlord said she was “shocked” by the refusals, adding: “This is discrimination because landlords in Scotland, like anywhere else, have to work within the parameters of the law.

“It is an exclusion based on our country’s legislation and it makes is nonsensical – the change actually benefits landlords, which should also benefit insurers.”

The Scottish Government said financial firms were warned about the change before it came into force. A spokesperson said: “The Council for Mortgage Lenders, now UK Finance, were consulted throughout the development and implementation of the new tenancy rules and did not raise this as an issue.”