As political uncertainty, higher prices and a number of new regulations affecting the property industry come into place, it seems landlords are looking North of the border for their next investments.
New figures have been released by SafeDeposits Scotland, which show a dramatic rise in investors who are renting out properties in Scotland, as opposed to where they are registered as living, in England.
Due to this analysis of data compiled with Scottish rental deposit registrations, there appears to have been a 430% rise in the number of English landlords using the system over the last few years (2012 to 2017).
By law, landlords and letting agents who take deposits from tenants must protect the sum in a government-backed scheme in the same part of the UK as the property is located. As such, the rise in English investors is measurable, as the deposits from tenants in Scottish properties must be protected in a Scottish scheme.
The SafeDeposits scheme now accounts for 60% of the Scottish market. Back in 2012, there were just 260 landlords who were registered as living in England, and as of last year alone, there were 1,366 new registrations on the system.
As of 2018, there have been 437 new registrations already, up until the start of April. This first four months of 2018 has been higher than the total figures for each year between 2012 to 2016 combined. This works out as a 226% increase during that same period of 2017 (January to the beginning of April).
Investment Properties in Scotland are looking Desirable for English Landlords
Lower house prices and more appealing Land and Buildings Transaction Tax (LBTT)
Aside from the somewhat changing nature of the Buy to Let Industry in the UK, there are other benefits that seem to be attracting more and more England-based landlords.
In Scotland, the average house price comes in at £148,783, compared to £226,000 for the UK as a whole. This alone makes it an attractive investment opportunity for prospective landlords, but when combined an LBTT rate of 0% up to the threshold of £145,000, prospective buyers will also save on the tax rates.
In England, a 2% tax rate is levied on properties of £125,000 or more, whereas to achieve this tax band in Scotland, the property would need to be purchased for £145,000 to £250,000.
Victoria Smith, Operations Manager at SafeDeposits Scotland comments; “SafeDeposits Scotland now holds over 3,300 deposits from English landlords on Scottish properties.
“In Scotland, the private rented sector accounts for 15% of the overall housing stock, growing from 5% before the turn of the millennium.
“While the sector expands and interest from landlords from outside Scotland increases, it is important that they understand the legal framework in which they are operating. For example, navigating deposit protection regulation and Private Residential Tenancy legislation is vital to managing tenancies successfully in Scotland.”