Rental property sales north of the border have outstripped purchases of these homes five-fold in the last three months, following the Scottish Government’s shake-up of the private rental sector.
Research by the National Landlords Association (NLA) found that almost a quarter (24%) of landlords with properties in Scotland have sold over the past three months, with just 5% purchasing in the same period.
The data covers transactions in April-June this year, four months after the Scottish Private Residential Tenancy was introduced in December 2017.
The Scottish Government insists that the reforms provide security, stability and predictability for tenants, as well as appropriate safeguards for landlords, lenders and investors.
However, the NLA warns that its findings, which arrive during festival season in Edinburgh, could affect up to 45,000 landlords, or approximately 67,000 rental properties.
The CEO of the NLA, Richard Lambert, says: “The Scottish Private Residential Tenancy system removes the flexibility of the sector to meet the varied needs of an ever-changing population of renters, in particular, students and those who only seek short-term tenancies, such as during the Edinburgh Festival.
“Because student landlords now have to provide indefinite tenancies, they won’t be able to advertise their properties for the Festival, as they won’t know for certain if they will be free and available by the end of July. If this sets a trend, and artists struggle to find short-term accommodation, the 2018 Edinburgh Festival could be the last to offer such a variety of talent.”
The NLA insists that the level of disinvestment in rental properties is a concern for the Scottish Government, and has urged the UK Parliament to pay close attention, as it currently consults on similar proposals for reforms in England and Wales.
Lambert continues: “The last quarter has seen the highest proportion of landlords selling properties in Scotland in any three-month period since the Government first announced their tenancy reforms in 2016.
“We warned these changes would unnerve investors in private rented homes in Scotland, and it should serve as a clear sign of what to expect if similar reforms are introduced elsewhere in the UK.”
Have you been affected by Scotland’s rental reforms?
We remind all landlords in both Scotland and the rest of the UK to comply with all lettings laws governing the private rental sector, following reports that 150,000 rental homes in Scotland have not received tenancy deposit protection.