"Rents are rising rapidly as a result of the new Land and Building Transaction Tax surcharge for buy-to-let properties"
Average residential rents in Scotland have shot up 1.3% from April, after the cost of the new Land and Buildings Transaction Tax (LBTT) surcharge has pushed up prices in the market.
This increase means that the average rent in Scotland now stands at £549 per month. This is the highest Scottish rents have been ever been, surpassing the previous record set in July 2015.
This month also marks five years since the Scottish National Party gained an overall majority in the Holyrood. Since then, average rents have seen a 7.9% (£40) upswing from £509 per month in May 2011.
Brian Moran, lettings director at Your Move Scotland, comments: “Rents are rising rapidly as a result of the new Land and Building Transaction Tax surcharge for buy-to-let properties. This tax hike has dissuaded landlords from investing in the sector leading to a shortage of homes to rent, compared to the demand for housing. With the limited supply of rental properties, potential tenants have been forced to compete to secure homes, pushing up rents. The introduction of this anti-landlord legislation from Holyrood has ensured the cost of the policy has hit tenants hardest.
Since the SNP came to power five years ago, monthly rents have increased by an average of £40. However, the rent control policy in the Scottish Government’s private tenancies bill will only treat the symptoms, not the cause of rising rents. By limiting the rent that can be charged on a property, becoming a landlord will become less appealing, limiting investment and forcing many to consider leaving the sector. This will lead to an even greater shortage of homes to rent.
In addition, without the potential incentive of higher rents, landlords will lack the motivation and finance to improve the quality of their properties. The Government needs to look at incentivising landlords to increase the supply of rental properties in Scotland. With more homes available to rent, tenants wouldn’t need to compete for properties and rents would be more affordable”
