publication date: Nov 14, 2023
author/source: Kate Faulkner OBE, Property Expert and Author of Which? Property Books
Scottish Association of Landlords - Scottish Letting Day
Scotland's landlord and letting agent conference
Thanks to the Scottish Association of Landlords, I had a lovely day presenting at Murrayfield Stadium in Edinburgh in November.
As part of the day, I was presenting on the Scottish housing market - how it had performed, how it would perform in the future and some of the key issues that landlords needed to consider, including whether buy to let investment can deliver better than other financial investments in the future. I also covered the problems of investing with cash rather than via a mortgage.
If you are in Scotland, do consider joining the SLA if you haven't already, its open to landlords and to agents: Scottish Association of Landlords
The key takeaways are that landlords need to:-
- Assess their own property price and rent performance versus averages for Scotland, then at a local level eg Edinburgh.
- Look at whether prices and rents are rising in line with - or ideally higher than inflation. If not, it's important to consider whether the investment is worthwhile continuing to invest in.
- Happily, it is always possible to make money out of property, even in a poor market, you just really have to know your stuff.
One other takeaway is that the Scottish efforts to reduce private landlords is backfiring badly on tenants. It's very clear that less landlords means less properties to let privately and this means tenants pay more rent, even with rent freezes in place.
A slightly 'happier' note for landlords and agents, although a worse one for tenants, is that the Scottish rent freeze of 3% increase a year is actually higher than the long term rental increases of 2% per year which the Office of National Statistics track back to 2012 - and before
So not only have the Scottish Government managed to lose landlords which has caused rents to rise, they are now still losing landlords due to the rent cap they have introduced and for tenants, this cap at 3% is actually higher than the long term average - if they had left the market alone (although I have no issue with increasing tenants rights).
However, they are not alone, even without rent freezes, Labour and the Conservatives in Wales and England have caused exactly the same problems, and as a result, all countries are now running out of stock
The reality is, the private rented sector was helping to absorb the housing crisis caused by a lack of social homes, it was not a contributor. Holding the market back has now accelerated the housing crisis and many vulnerable tenants, especially those on benefits, can't afford to rent privately anymore, which is tough, especially when many are eligible for a social home that successive governments and local authorities have failed to deliver
When MPs - of all parties - wake up to the fact that the private rental sector is key to solving the housing crisis, not the cause, then we can all work together to help put roofs over people's heads, not play a losing game of 'robbing Peter' to 'pay Paul.
To see all the presentations from the Scottish Letting Day, please click here.