Jun
24
Budget impact on Private Lettings Sector
Filed Under Did you Know...?, Market News, Renting news, Scottish Property News, Uncategorized by DanCookson | Leave a Comment
The recent increase in capital gains tax to 28% is likely to have an impact on the private rental sector. Although it is not as high as the 40% to 50% rises that were being suggested last week, landlords will still have to adjust to a new investment landscape in which the housing sales market is likely to be flat and where reliance on capital appreciation and disposal will not generate the returns of former years.
The majority of the 100,000 Private Landlords in Scotland have very small portfolios and are looking for capital growth on their investment. If Private Landlords are discouraged from remaining in the market by the prospects of lower capital gains and hard to get finance there is a possibility that they will withdraw from ‘buy to let’ leading to a lack of supply of suitable rental properties to meet the growing demand in the future. If this pans out rents will have to rise which will eventually attract serious landlords back in to the market.
“I believe a ‘rental income’ based approach to property investment will be the way forward – which will encourage or require landlords to enhance and maintain their properties to the highest standards so that they can achieve the higher rentals.”
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