Tenants face higher rents
Landlords shun private rented market as taxes add to costs
Allan Gardner: demand for rented property is rising (photo: Terry Murden)
Tenants are facing a hike in rents as government taxes deter landlords from entering the private rented sector, it was claimed yesterday.
Those in Edinburgh, where landlords are paying a higher price for property, will be hardest hit and the poorest will suffer most.
Allan Gardner a financial services director at estate agency and legal firm Aberdein Considine, told a conference that rising costs associated with the sector meant there were fewer landlords coming into the market.
This was because of a number of factors including government-imposed taxes which were making it less attractive as an investment proposition.
Landlords were liable for capital gains tax, inheritance tax and the new 3% additional dwelling tax. On top of that, they were faced with 8% management fees. Property in Edinburgh was between 10% and 20% higher in Scotland which also had to be factored into rental levels.
“Demand is continuing to grow and so with fewer landlords it means rents will rise,” he said.
The conference in Edinburgh heard that the number of Scottish households in the private rented sector would rise from 14% in 2015 to 19% by 2020.