Agent says buy to let tax change threatens supply - just as demand surges

People coming to work in Scotland from overseas are making up an increasing proportion of private sector tenants according to a lettings agency - but that their vote of confidence in moving there comes just as tax changes threaten the supply of homes to let.

DJ Alexander Lettings says more than 40 per cent of named applicants for new leases conducted by the firm during November came from outside the UK.

This is a marked increase on August, when foreigners made up just 88 out of 285 new applicants, equivalent to just over 30 per cent. 

Although a majority of the foreign applicants are EU citizens, a substantial minority came from further afield; only a very small minority are married to, or partners of, UK passport-holders.

The agency, which has an estimated 25 per cent of the private lettings market in Edinburgh, says these figures are likely to be typical of the wider Scottish rental sector and send out a positive message.

“They confirm a trend which has been noticeable over the past couple of years - that is an increase in younger people from the EU and further afield coming to live and work in Edinburgh and Glasgow. We consider this to be a reflection of the economic confidence of the two cities” explains Rob Trotter, the firm’s business development manager. 

However, managing director David Alexander says the trend is also a warning to politicians. 

“Buy to let landlords are being increasingly squeezed by taxation and regulation, which is threatening to slow down the number of properties becoming available to let. Therefore while the demand from overseas is generally welcome, this could lead to shortages affecting both them and the native population seeking rental accommodation.” 

The Scottish Government has broadly replicated the tax and stamp duty proposals put forward for most of the rest of the United Kingdom by the UK government’s Chancellor, George Osborne.