It’s been a perfect storm of government changes for buy-to-let investors over the past couples of years, with more coming down the line in Scotland.
The two key legislative changes transforming the residential letting sector north of the border are firstly the replacement of Short Assured Tenancies by Private Residential Tenancies, offering tenants increased security of tenure and fewer grounds on which they may be subject to eviction.
Secondly, from 31 January the Scottish government introduced its new code of practice and mandatory register for letting agents. As part of this, key individuals in a letting agency must meet a new minimum level of training.
Agents who have not undertaken the relevant training or qualifications by 30 September 2018 will not be able to continue letting properties.
These major legislative changes being introduced in Scotland’s letting sector are a major turning point but should not be feared by landlords, according to Galbraith.
Bob Cherry, a partner with the Scottish property consultancy, who manages letting activity for the firm, said: “Essentially these two legislative changes combined will add up to increased professionalism in the letting sector, particularly in terms of how letting agents operate. All reputable letting agents will already to a large extent be in compliance with the new code.
“What will happen is that fewer letting agents will set up in business and potentially fewer new landlords may come into the sector for the first time.
“As long as landlords take professional advice, they will be well supported to navigate the complexities of the new regulatory regime.
“In the medium term, rents are likely to rise, which can only be good news for landlords.”
Further legislative changes over the next 18 months, in terms of the change in the minimum energy performance certificate permissible in Scotland will help to raise standards for available property, according to Cherry.
He added: “We have already begun helping landlords to comply with these requirements and, in many cases, we are able to help landlords access funding for improvements to their property which bring it into line with the EPC regulations, often at no cost to them.
“Property is still viewed as one of the most popular and safest forms of investment and, with the right advice, can offer landlords a very appealing and long-term investment option, given the continued shortage of good quality housing supply.”