06 August 2018

 By Jamie McKenzie, Property Account Executive
 

 

It’s fair to say it has been a busy year so far in the Scottish property market.

 

The Government are building more homes, but there is clearly still a major housing shortage in Scotland resulting in an impact across all sectors; particularly for young first-time buyers who are finding it increasingly difficult to get on the property ladder.

 

‘Generation Rent’ is fast becoming a reality and many younger people simply can’t afford to own a home in the town they grew up in. Which is sad, but a definite sign of the times.

 

High Demand

 

The Scottish property market continues to boom. The demand for residential property (particularly within the Capital and in areas such as Leith and Stockbridge) still massively outstrips supply. This in turn drives up property prices with no sign of it easing any time soon.  According to a recent study, Edinburgh property prices are rising at a higher rate than any other city in the UK, with Glasgow not too far behind following the regeneration of the East End and growing popularity of Finnieston and West End areas.

 

Build-to-Rent

 

We are finally seeing the Build to Rent (BTR) sector gathering pace in Scotland; purpose-built investor owned residential properties intended specifically for renting rather than sale. This is backed by the Scottish Government to help deal with the housing supply shortage and whilst we are still way behind other UK cities there are now over 4,000 BTR units in Scotland. This is a sector which is expected to grow rapidly.

 

Scottish Private Residential Tenancy

 

In December 2017, the new Scottish Private Residential Tenancy (SPRT) was introduced, a new tenancy regime for residential let properties in Scotland replacing the previous short-assured tenancy. Designed to improve the private rented sector (PRS) and provide greater security for tenants, changes to the tenancy include;

 

  • - No fixed term. The landlord can only end the tenancy under one of 18 grounds for eviction (such as selling or moving into the property)
  • - Rent increases can only be made every 12 months with 3 months’ notice (the tenant has the right to challenge this if they feel increase is unfair)
  • - Longer notice period if the landlord has been in the property longer than 6 months
     

Regulation

 

Regulation of the PRS was also introduced in January 2018, which includes;

 

  • - A statutory ‘Code of Practice’ to be followed by all registered letting agents
  • - mandatory training and qualifications for staff
  • - A First-tier Tribunal, where tenancy issues are resolved via a panel of sector professionals rather than through the court system.

 

In a buoyant private rented market with so many letting agents competing for business, I personally believe that this level of regulation is a great thing for the sector in driving up the standards of practice and filtering out the rogue individuals.

 

Scotland needs a well-regulated property sector, with robust dispute channels, more than ever and with the colossal rise of AirBnB and other short-term let firms, it’s surely only a matter of time until we see stringent regulation across the short term let sector.

 

 

If you have any questions or queries please contact Jamie McKenzie  on 0131 561 2408 or [email protected]

 

 


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