Scotland seems to be attracting increasing numbers of landlords who reside south of the border. SafeDeposits Scotland has recorded a sharp rise in tenancy deposit registrations from English landlords for properties in Scotland in the past few years. Since 2012, the number has risen by over 430% and this growing trend is set to continue.
English landlords drawn to Scottish buy to let market
Fresh data from SafeDeposits Scotland revealed that in 2012, when the scheme was first launched, there were only 260 buy to let landlords living in England who registered deposits with them on Scottish rental properties. However, in 2017 this figure saw a dramatic increase to 1,388 new registrations.
According to Victoria Smith, Operations Manager at SafeDeposits Scotland, this “could be down to a number of contributing factors, for example, variations in rates of Stamp Duty in England and Land and Buildings Transaction Tax in Scotland.”
Growing trend set to continue
The tenancy deposit protection scheme currently holds over 3,300 deposits from English landlords on properties in Scotland. Its data for 2018 reveals positive signs that the trend will continue. To date (April 2018), the number of English based landlords registering with the scheme has reached 437 and is up 226% on the same period last year.
Scottish letting agents confirm increased activity on the market from English landlords seeking buy to lets in Scotland.
Charles McCosh, Lettings and Investment Valuer at Rettie & Co in Edinburgh, says: “We are seeing a lot of English investors looking at Scotland now. A lack of stock on the sales market means people are looking to rent instead.”
This, combined with an upward trend in Scottish house prices which are currently rising more than 2% faster than the UK’s overall rate, according to Adrian Sangster, Leasing Director of Aberdein Considine, “could suggest that Scotland is still viewed as good value for money compared to England.”
Different deposit rules in England and Scotland
SafeDeposits Scotland highlights that Scotland has different deposit protection legislation from England and warns landlords to make sure they are using the scheme where their rented property is located.
Victoria Smith said: “In Scotland, the private rented sector accounts for 15% of the overall housing stock, growing from 5% before the turn of the millennium. While the sector expands and interest from landlords from outside Scotland increases, it is important that they understand the legal framework in which they are operating. For example, navigating deposit protection regulation and Private Residential Tenancy legislation is vital to managing tenancies successfully in Scotland.”
She continued: “It’s interesting to note that the most significant landlord prosecution for non-compliance was a landlord living in St Albans who failed to protect her Edinburgh tenants’ deposits. Seeing that the legislation has teeth may have spurred other English landlords to make sure they weren’t breaking the law. The landlords’ legal representative at the time (2016) explained she was as ‘an amateur landlady’ but the Sheriff described her as being ‘dilatory in attending to her obligations’.”
SafeDeposits Scotland is the largest of the three Government backed tenancy deposit schemes in the country, with almost 60% of the market, accounting for more than £84m worth of individual deposits.
