More than four times as many English landlords are investing in Scottish buy-to-lets than six years ago. In 2012, just 260 new landlords from England registered deposits with SafeDeposits Scotland for rental properties. In 2017, this had increased to 1,388 new registrations. Already this year, the trend is continuing with an increase of 226% compared to the same period last year. The analysis by Scottish rental deposits firm, SafeDeposits Scotland, shows a 430% rise in English landlords using this deposit system since 2012. SafeDeposits Scotland operations manager, Victoria Smith, said the company now holds more than 3,300 deposits on Scottish rental properties from landlords in England.
The popularity of Scotland has been put down to cheaper property prices along with higher yields and more attractive tax relief, such as the rate of stamp duty and the Scottish Land and Buildings Transaction Tax, which is 0% on properties up to £145,000 and 2% for properties between £145,000 and £250,000, rising in bands to 12% for properties valued at more than £750,000.
Ms Smith said the private-rental sector now accounts for 15% of the housing sector, which has risen from 5% at the end of the 1990s. Landlords looking north to invest in Scotland need to be aware of the different laws which apply there, such as the Private Residential Tenancy legislation and deposit protection regulations. Private Residential Tenancy is applied to any new tenancy, and means no more fixed terms, longer notice periods, only one rent increase every 12 months with three months’ notice, and a simpler notice to quit process. Tenants’ deposits also need to be lodged with a tenancy deposit scheme within 30 business days.
A consultation is underway in Scotland to make the registration of private landlords even more robust by providing more information. It has been mandatory for landlords to be on the register since 2004 and it’s regarded as an important factor in the improved living standards for more than 770,000 tenants in privately-rented accommodation. The consultation proposes to ask for further information, compliance with legal duties concerning property rentals and increasing landlord registration application fees. The current fee structure could be amended to increase the principal fee from £55 to £70 and the fee for each property from £11 to £14. Landlords who pay online receive a 10% discount. Landlords and other interested parties have until June 7 to make their comments on this consultation.
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