Private rental reforms rolled out across Scotland are proving damaging for the lettings sector, with data for the last three months showing that rental property sales have outstripped purchases fivefold.
Almost a quarter of private landlords in Scotland have sold at least one property in the last three months, while just 5% have added to their portfolio, according to the findings from the report by the National Landlords Association (NLA).
The Scottish Private Residential Tenancy was introduced in December 2017, and the data shows property transactions which occurred between April and June this year.
Despite the alarming statistics, the Scottish Government has defended its reforms, stating that they provide security, stability and predictability for tenants, as well as appropriate safeguards for landlords, lenders and investors.
However, the NLA has warned that the news could affect up to 45,000 landlords or approximately 67,000 rental properties across the country.
Richard Lambert, chief executive officer of the NLA, expressed his concerns: ‘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,’ he pointed out.
The NLA has urged the UK Parliament to continue to monitor the situation closely, as consultations on potential similar proposals for England and Wales remain ongoing.
‘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 explained.
‘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,’ he added.