As Scotland’s Budget announcement approaches on December 4th, there’s a lot of anticipation around how it might shape the future of the private rented sector (PRS). With ongoing discussions about tenant protections, landlord taxes and rent controls, it’s clear that housing policy remains a top priority for the Scottish Government. In episode 94 of Citylets Lets Talk, Timothy Douglas, Head of Policy and Campaigns at Propertymark, joins us to discuss some of the biggest questions facing the sector today.
One of the most significant changes in recent years has been the introduction of the Cost of Living (Tenant Protection) (Scotland) Act 2022. This legislation, along with its extensions, was intended to provide greater protections for tenants amid rising living costs. However, there are ongoing debates about the unintended effects of these measures on landlords and the overall appeal of the PRS to investors. Propertymark has raised concerns with the Scottish Government, advocating for a balanced approach that supports both tenants and landlords.
How has this change influenced buy-to-let investment?
A key issue up for discussion is the impact of the increased Land and Buildings Transaction Tax (LBTT), which now stands at 6% for additional properties. This hike was designed to generate additional revenue, but the question remains: how has this change influenced buy-to-let investment, and does it deter new investors from entering the market? Timothy sheds light on how the costs compare to purchasing a primary residence and discusses the rationale behind Propertymark’s recommendations for potential adjustments.
Propertymark has also been vocal about the importance of increasing Scotland’s social housing stock. With affordable housing in high demand, could more investment in social housing help reduce pressure on the PRS? Timothy explores this idea and considers the potential impact on landlords and tenants alike. As part of the wider housing policy conversation, he also touches on the prospect of designated rent control areas, which could have significant long-term implications for the PRS. Propertymark has campaigned on this issue, urging policymakers to weigh the effects on housing affordability and market stability.
In the upcoming Budget, government spending constraints are expected to play a major role in shaping housing policy. Attracting investment into the PRS is one suggested approach, providing an alternative to rent controls, which some argue may have a cooling effect on housing initiatives. What strategies could be employed to encourage investment in rental properties, and how might this benefit both renters and landlords?
Common misconceptions of landlords
Beyond policies and numbers, it’s essential to consider the real-world impacts of these challenges on the lives of renters and landlords. Workforce mobility, family stability, and economic well-being are all tied to the health of Scotland’s housing market. Timothy highlights why it’s vital for policymakers to understand the financial pressures landlords face, and he addresses common misconceptions surrounding their roles in the housing market.
As we look ahead, Scotland’s housing market stands at a critical juncture. Will the Budget provide relief for renters and landlords alike, or will it introduce new challenges? Be sure to listen to the full episode to get Timothy’s expert take on these pressing questions.
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