New data has revealed that the Scottish Government’s private rental reforms are shaking up the sector, with rental property sales outdoing purchases five-fold in the last three months.
The research, carried out by the National Landlords Association (NLA), revealed that nearly a quarter (24%) of landlords with property in Scotland have sold their home over the last three months. In the same time, only 5% have bought a home.
The data covers property transactions between April and June this year, starting just four months after the Scottish Private Residential Tenancy was introduced in December 2017.
While the Scottish Government insist that the reforms offer security, stability and predictability for tenants, as well as appropriate safeguards for landlords, lenders and investors, the NLA has warned that they could negatively affect up to 45,000 landlords or approximately 67,000 rental properties.
The warning comes during the height of the festival season in Edinburgh – with the Edinburgh Fringe and the Edinburgh International Festival taking place in the month of August – where many visitors and performers require short-term accommodation.
“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,” Richard Lambert, chief executive of the NLA, said.
“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,” he added. “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 argues that the level of divestment in rented property is a concern for the Scottish Government. With this in mind, it has urged the UK Parliament to pay close attention as it currently consults on similar plans for rental reforms in England and Wales.
“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,” Lambert went on. “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”.