As featured in the Scotsman on Saturday 16 December, Andrew Diamond, Partner and Head of our Residential Property team, says he is seeing increasing evidence of flats being removed from the rental sector, reducing supply and pushing up rent costs.
Housing landlords are selling up because the Scottish Government has created a “hostile political environment and Andrew fears the private rental market is suffering a double-whammy impacting supply as investors also turn away from buy-to-let.
He is urging the Scottish Government to reset its relationship with the sector, benefitting both landlords and tenants by stopping the supply of homes falling further.
Andrew is calling on the Scottish Government, in its Budget next week, to:
- Scrap rent caps in order to encourage more supply, thereby easing the pressure on rent rises
- Commit to reviewing the bands, thresholds and rates of Land Buildings Transaction Tax (LBTT) and Additional Dwelling Supplement (ADS) to ensure they encourage market activity
Andrew said:
“More and more sellers are coming to us with properties they previously rented out because they do not see a future in which they can operate viably and fairly in the current climate.
“I cannot remember the last time I had a purchaser knocking on my door who was buying to let. The vast majority of our dealings with landlords at the moment are disposals or remortgaging.
“I have no doubt that government policy is designed to help tenants, but the clear unintended consequence is that the opposite is true. The size of our rental market is shrinking because institutional investors are taking their business elsewhere, and current landlords are coming to us to sell their properties. This decreasing supply is propelling rent prices. It makes neither social or financial sense to keep digging a hole here.
“The vast majority of housing landlords are decent people providing quality homes. The treatment of the private rented sector by the Scottish Government has been unhelpful, and at times looks antagonistic. Repairing that relationship would benefit landlords, of course, but it would benefit tenants even more. No group of people has been more harmed by the anti-landlord, anti-investor environment than tenants themselves.”
A 3% rent increase cap for sitting tenants - set by the Scottish Government - is in place until March (2024).
At the same time, a Housing Bill is being introduced which could allow for ministers to apply that same cap for rate rises imposed during changes of tenancy, as well as for sitting tenants.
Lindsays’ estate agency team operates mainly throughout Edinburgh, the Lothians, Perthshire and Tayside.