HIGH street bank TSB has overturned a ban on selling insurance to Scottish landlords after it was exposed in The National.

On Tuesday this newspaper revealed that the lender was no longer accepting new customers for the insurance product after the Scottish Government introduced new rules on renting. The new Private Residential Tenancy (PRT) was brought in on December 1 following years of campaigning by organisations such as Shelter Scotland.

It is designed to give “more security” to tenants by allowing their leases to continue on a monthly rolling basis, and to provide “better safeguards” for landlords by establishing 18 grounds for eviction.

But although Housing Minister Kevin Stewart said it would bring “significant improvements” for all parties, TSB told one Scottish application the new rules were comparable to bankruptcy and possession of an anti-social behaviour order, and refused to strike a deal.

Citing PRT as the reason, the lender told us: “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.”

The landlord, who asked not to be named, had been seeking cover for her Dundee property at the time .

She described the knock-back as “discrimination”, and said: “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 is nonsensical.”

The Scottish Government said it would look into the situation and that industry bodies “did not raise this as an issue” throughout the development and implementation of the new tenancy rules.

Now, just days later, TSB announced it has changed its position.

A spokesperson said: “Following the introduction of new legislation in December 2017, we have reviewed our acceptance criteria for home insurance for landlords.

“As a result, I am pleased we are now able to offer new policies for landlords with Scottish properties regardless of the length of any tenancy agreements.”

Competitor Saga also rejected business from the landlord, but said this had been done in error and confirmed that the staff involved would be retrained.

Years of growth in the sector has taken the number of households in private rental accommodation to more than 760,000.

Welcoming the new rules in December, Shelter Scotland director Graeme Brown said: “Today represents a new dawn for all private renters in Scotland.”

Housing Minister Kevin Stewart 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.

“The private residential tenancy is an open-ended tenancy which can only be brought to an end by a tenant giving notice or a landlord using one (or more) of the 18 grounds for eviction.

“We are glad that TSB have now reversed this decision.”