Transaction tax

“Nicola Sturgeon’s bureaucracy is strangling Scottish landlords”

According to the National Union of Students Scotland, the average private landlord charges students £7,322 a year for accommodation, while the average university charges £5,809. Ms Harvey charges between £3,000 and £3,500 for a ten month rental.

“If landlords like me leave the market, students will either go to expensive residences or rogue landlords,” she added.

The proposed rules would be the latest in a string of tough tax and regulatory changes aimed at Scottish investors over the past seven years. In 2015, Land and Building Transactions Tax replaced Stamp Duty in Scotland and added a 4 percentage point surcharge to buy-to-let purchases, followed by the phasing out of mortgage interest tax relief a year later .

The number of properties in the private rental sector fell by 22,000 between 2017 and 2020, according to analysis of landlord records by the Scottish Association of Landlords.

John Blackwood of the trade body said: ‘Many landlords say they are selling for fear of future legislative changes. So it should come as no surprise to any politician that owners are voting with their feet and leaving the industry altogether.

“No politician will lose sleep for not getting the ‘homeowners vote’, but what they don’t realize is that with owners selling and properties being bought by owner occupiers, fewer and fewer properties will be available for rent.”

The Scottish government’s proposals also include the establishment of minimum energy efficiency standards, similar to the policy deployed in England.

The rules will require Scottish landlords to ensure properties have a minimum energy performance certificate rating of C, but only where ‘technically feasible and cost effective’. They will come into effect in 2025 for new lets and experts have said this will result in investors facing renovation bills of several thousand pounds.

Mr Blackwood added: “We agree that we need a private rental sector in Scotland where the rights of tenants are protected, but we also need the interests and rights of landlord investors to be enshrined in law to ensure a well-functioning industry.”

Owner Dermot Healy has sold five properties in the past year, after three decades in the buy-to-let business. He has 20 homes left in his portfolio, but three are currently up for sale.

He said: “I have made the decision to sell due to constantly changing legislation and increasing costs imposed on owners buying to let.

“Many other small landlords in this area of ​​Scotland are leaving the sector for the same reasons and the inevitable result will be a reduction in the private supply of property and an increase in rents.

“Our business is still marginally profitable after selling the properties we completed last year, but much less than in previous years. If the trend continues, we will sell the remaining properties we own and exit the business altogether.”

Rent control has become increasingly popular in Europe, credited by proponents with keeping housing affordable, especially in crowded cities.

London Mayor Sadiq Khan recently renewed his call for rent control in the capital and the concept is currently being considered by the Welsh government.

However, critics have warned that rent control is failing to reform housing affordability. Last year, Germany’s highest court ruled illegal rent caps imposed on Berlin since 2015, reversing the policy and forcing tenants to repay landlords thousands of euros in savings.