Prior to the increase of ADS (Additional Dwelling Supplement), our evidence showed that 68 per cent of letting agents muted they'd seen an increase in notices to sell from their landlords. This was as a direct result of the Scottish Government’s decision to cap rents under the Cost of Living (Tenant Protection) (Scotland) Act 2022.
Emerson disclosed that one of Propertymark’s largest member agencies, which manages over 3,000 tenancies across Scotland, issued 16 notices for rent arrears in 2021 alone and 66 due to landlords wishing to sell in 2022.
Using this insight from survey data of our member agents, Emerson stressed the increasing burdens placed on landlords in the private rented sector (PRS) including:
- the withdrawal of tax relief on mortgage interest costs and replacement with a 20% tax credit
- removal of the 10% Wear and Tear Allowance for fully furnished properties being replaced with an at-cost relief
- Capital Gains Tax for rented property was maintained at 28% when it was reduced to 18% for other assets
- a rise in corporation tax from 19% to 25% from 2023
PRS is the solution to resolve housing crisis
The lack of property is the root cause of rent increases and rising figures on social housing lists. We believe the PRS is a key solution to resolving the housing crisis, but if the Scottish Government continue with policies that disincentive landlords it will only make the situation worse.
Nathan Emerson, CEO of Propertymark commented:
The Scottish Government needs to drastically improve the way that it values the private rented sector as it plays a huge role in housing the nation.
If it continues with its flippant disregard, the investment will only further decline, and rent will continue to rise.
Encourage investment in the PRS
In light of these concerns and due to the importance of the PRS in the Scottish housing system, Propertymark wants the Scottish Government to boost the supply of rented housing, reduce rent rises and reduce the surcharge on additional homes to encourage further investment.
A wider review of all taxes for private landlords should be undertaken too. This will enable policies to be introduced that reduce costs for those wishing to invest in the sector, which will help reduce rent for tenants, lead to longer-term tenancies and make it more affordable for renters.
