Landlords are bailing out of the Scottish rental market because of legislative changes being imposed by the Scottish Government, it has been claimed.
Most recently, the Government confirmed it will be abolishing the “no fault” ground for possession in a new housing act this autumn.
Thomas Ashdown, founder of specialist lettings portal Citylets, said he was very concerned at the “current trajectory” of the market.
He singled out the abolition of the “no fault” ground as the most worrying.
He said: “We fully understand and support the intent to make renting in the PRS a better place. However, as I understand it, measures seem set to be introduced that could further limit supply at a time when there is a chronic shortage in major cities.
“The plan to have special measures to deal with rent rises in these areas seems like an overt case of addressing the symptoms whilst exacerbating the root cause.
“There is no doubt that many small-scale landlords will and indeed have already left the sector due to the increasing burden of legislation and spectre of decreased control over their asset.
“That being the case, the need to ensure favourable conditions for institutional investment is surely paramount, yet it is presently uncertain as to whether this will be achieved near term.”
Citylets reports that average rents in Scotland are continuing to climb, rising by 7.4% over the year to March 31 to stand at an average high of £751 per month.
National rents have risen 16.4% since 2008.
Annual growth in Edinburgh and Glasgow has been 7.7% and 8.1% respectively, but in Aberdeen just 2.2%.
Comments (5)
I understand that the Welsh government (labour controlled) is about to cause the same concerns with its housing bill that received Royal Ascent last September but waiting till after the election before making it common knowledge with the public.
How many homes will be left empty when someone has to move away for a few years due to work – as the risk of renting will be too great.
Another great wheeze from our wonderful “Scottish” government. This lot are surely doing their utmost to drive landlords away, maybe the master plan is to get all property into state ownership and then give them rent free to tenants … oh! this has already been tried … in the USSR!!
When are these people going to realise that any downturn in supply will push rents up unless demand also falls? It’s the most basic of economic theories.
There’s been all sorts of proposals and suggestions from politicians, local and central, over the last year or two, some of them like the above are coming to pass, others such as cap on rents and long minimum tenancies still in the wings.
I’ve been saying for ages that anything that affects a landlord’s security and/or return will lead to them simply cashing in in what is a far better sales market when most of them bought.
As risk increases by further controls being introduced investors will want an increase in return. Politicians need to start living in the real world instead of trying to legislate their way out of the mistakes