Scottish landlords hope Sturgeon resignation leads to policy reset – Mortgage Strategy
Landlords in Scotland hope the resignation of Nicola Sturgeon as the country’s first minister will lead to a reset of policies which they say has “driven them out” of the buy-to-let sector.
Since the Scottish National Party leader took over from Alex Salmond as first minister in November 2014, they say she has presided over increased letting agent regulation, higher taxes for landlords and tight rent controls in a bid to protect tenants — but has also seen landlords leave the sector.
Last month, the Scottish government proposed a freeze on rents for private tenants will be replaced by a 3% rent cap, with exemptions of rises of up to 6%, for at least another six months.
Tenants Rights’ Minister Patrick Harvie said at the time: “While the primary purpose of the legislation is to support tenants, I recognise that costs have been rising for landlords too.”
The move followed the government’s introduction of a rent freeze under its Cost of Living (Tenant Protection) Act passed last October as part of its response to the cost-of-living crisis.
The administration also lifted its additional dwelling supplement tax, first introduced in 2016, for landlords and second homeowners from 4% to 6% in its December Budget.
The Scottish Association of Landlords said: “We would urge the Scottish government to consider removing the additional dwelling supplement, or at the very least reduce it, to make the Scottish private rented sector a more attractive investment choice for landlords and stem the reduction in the volume of properties available to tenants seeking accommodation in the sector.”
The property industry says the effect of these changes has been to force more landlords to consider selling up.
Around 68% of Scottish-based estate agents said they have an increase in notices to sell due to these measures in a December poll by agent’s body Propertymark.
It added that 87% of landlords had no desire to increase their portfolios in the country.
Property professionals point out this comes on top of an existing exodus of landlords from the country.
The Scottish Household Survey showed that the private rented sector accounted for 15% of households in the country, with around 370,000 households in 2016.
By 2020, figures released by the Scottish Government confirmed this number had fallen by 12% to 325,649 properties.
The Scottish Association of Landlords chief executive John Blackwood says: “Nicola Sturgeon’s commitment to public service and her stamina and longevity at the very top of Scottish politics for the past 16 years is to be admired and she should be thanked for her commitment and contribution.
“However, on policy matters such as solving Scotland’s housing crisis, the no doubt good intentions of her government have not been matched either in proposals or implementation.
“Rather than taking a collegiate and collaborative approach to encourage investment in all parts of the sector to provide safe, warm and affordable homes, she has taxed investment out of Scotland.
“The SNP/Green restrictions on the private rented sector have had the exact opposite of their intended effect. They have reduced investment, driven landlords out of the sector, reduced supply and driven up costs which have led to higher rents.
“I hope whoever takes over as leader of the SNP will work with all parts of the housing sector to solve the very real, structural issues we face so we can provide the correct mix of social, rented and owner-occupied homes that Scotland needs.”
Propertymark head of policy and campaigns says that throughout Sturgeon’s time as first minister “the housing and property sector in Scotland has gone through significant change.
He adds: “We’ve seen the introduction of letting agent regulation and registration, increased tax burdens on those wishing to buy property as a landlord or second homeowner and more recently a continued desire from her administration to introduce damaging long-term rent control measures.
“A change of leadership can often lead to a shift in focus but on its own is unlikely to restore confidence among investors who ultimately can unlock increased supply for tenants and better-quality homes for all.
“Propertymark stands ready to work with her successor to deliver proportionate and workable solutions for the sector that are based on evidence.”