Scottish rent costs rocket amid the very idea of Rent Controls

Scottish rent costs rocket amid the very idea of Rent Controls

10:52 AM, 1st March 2018, About 4 years ago 52

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44% of Scottish tenants saw their rent costs rise in January, a considerable contrast to the national average of 19%, ARLA Propertymark reveals.

The findings come following the introduction of the new Private Rented (Tenancies) (Scotland) Act on 1st December 2017, highlighting a market reaction to indefinite tenancies and the potential for rent controls.

David Cox, Chief Executive, ARLA Propertymark comments:

“Rent controls have a history of dramatically deteriorating property conditions as landlords struggle to meet mortgage payments in addition to maintenance costs. However, it seems the very idea of these controls – and open-ended tenancies – is now affecting rent prices for tenants; in anticipation, landlords are raising rents to make sure they can make ends meet, should they be introduced.

“It’s now been two full months since this form of new Private Residential Tenancy came into force in Scotland and while in December, just over a third 36% of agents witnessed rent hikes, January’s results show a much larger swing.

“For the sake of the Scottish rental sector we hope this isn’t a growing trend, but while rent controls are on the agenda, it’s just a waiting game to gauge how the market reacts”



Comments

by Monty Bodkin

11:50 AM, 6th March 2018, About 4 years ago

I've been selling too but only to consolidate.
And I'm also diversified.
It doesn't make financial sense for someone to panic sell BMV all at once if they don't have to. Why now? Why not a phased structured sell from 2015?
It is not the actions of someone financially astute.
I remain sceptical.

by dismayed landlord

11:51 AM, 6th March 2018, About 4 years ago

Monty, it not all about the money. Ken, if you can give me the name of the portfolio buyers you have dealt with I'll appreciate it. I am off as I am unhappy with the stigma now attached to being a landlord and the government wanting to make us the scapegoats. I'll accept 10% BMV - less for me less for HMRC. warms my heart.

by Ken Smith

12:36 PM, 6th March 2018, About 4 years ago

Reply to the comment left by Monty Bodkin at 06/03/2018 - 11:50
Monty
Remain sceptical all you want. You fail to appreciate my luxury of being able to do what I want for my own reasons

My biggest mistake in business has been making more money than I ever really needed. I realise now that I really didn't need, to do what I wanted, as much as I thought I did when I had nothing. The saying 'enough is a feast' is very true,

I'm not panicking - that's for fools. I'm doing exactly what I want for my own reasons.

Regarding CGT 'hits' by selling relatively quickly - so what? The allowance, and savings, are peanuts really for me.

The old adage of 'Dont let the tax tail wag the investment dog' still holds true.

We are all different Monty. Don't have a closed mind - it's the most expensive thing you'll ever own.

Dismayed Landlord. I don't mind doing that when my deal has gone through - hope you understand! It's being shepherded to completion nicely - but often a slip twixt cup and lip!

Having said all that, there are lots of portfolio sales agents out there - just Google them. If you make sure you have a proper financial advising accountant, as Asif suggested, and a good agent, and price realistically - you can exit the market pretty swiftly. It sounds like your portfolio is solid and, being in the South East since 1996 - you should have lots of equity.

I think for you it may be good - even with a bigger CGT bill than if you phased sales over say 10 years. Your health and peace of mind seem to be suffering. As far as thinking of your offspring - think of yourself first. it's your life.

You're clearly a decent person and I'm sure they will understand and support you.

by AA

22:36 PM, 6th March 2018, About 4 years ago

Dismayed Landlord -Will this fly ? Make what you can mortgage free gift it to your kids but keep the rental stream. 7 years later zero tax . Its a gift and 2 fingers to hmrc. Its an idea. Does anyone see a problem with this ?
And why do you care so much what people think or say ? I grew up in the politically correct and sensitive 70 s.
Money isn't everything but to quote Del boy - it sure takes the sting out of being poor.
Ken - there comes a point in life where you live for your kids.
This country has gone to the dogs. Everyone has a degree rendering it worthless, a low wage economy , zero hours or temp contracts, zero career progression and law happy.
The kids will need a helping hand. I would not bail out, I am standing my ground.

by Old Mrs Landlord

23:08 PM, 6th March 2018, About 4 years ago

No Asif, it won't fly. HMRC don't allow you to give something away and still retain the benefit of it. Just because it's yours that doesn't mean you can do what you like with it if the powers that be class it as tax evasion. One way or another they're gonna get you...

by Richard Adams

0:00 AM, 7th March 2018, About 4 years ago

Why, Old Mrs Landlord, can't Asif do what he suggests with the rent also going to his children so he's retaining no benefit like you say he must. If afterwards the children pay him the rent then he's sorted. OK tax on the rental income must be paid by someone but that is the case anyway. At least he's sorted the IHT liability provided he lives for 7 years. Bit of creativity needed - that's all.
Generally I'm fed up hearing the country has gone to the dogs. OK we landlords don't like stuff happening right now but that doesn't make everything bad. Where is it any better? Grass greener on the other side? After 1066 the Anglo Saxons said the country had gone to the dogs when the Normans took over and inflicted the feudal system. Ever since, the "good old days" have always been quoted slagging off today.

by Old Mrs Landlord

0:36 AM, 7th March 2018, About 4 years ago

Reply to the comment left by Richard Adams at 07/03/2018 - 00:00Obviously Asif is free to try any subterfuge he likes to circumvent the IHT laws but remember HMRT have access to our bank accounts and such Potentially Exempt Transfers are rigorously investigated. Also I have an idea that if you gift a property stamp duty becomes payable on the market value at the date of the gift. I am not sure about the capital gains tax position but wouldn't be surprised if there were implications there too. I am not an accountant or tax adviser, merely someone who's old enough to have looked at these strategies. I would counsel discussing with a qualified tax specialist before taking "creative" action.
I don't think I said anything to indicate I thought the country was going to the dogs.

by Richard Adams

0:48 AM, 7th March 2018, About 4 years ago

Hardly a subterfuge. If he doesn't gift a property but sells it sometime then stamp duty and capital gains if they both apply, will have to be faced up to anyway some time. Not a question of if, only when. Surely though if he gifts the property and lives for 7 years IHT is legally kicked into the long grass like if he was gifting a sum of money, an expensive painting or anything? Only problem I can foresee is some future change in the law regarding gifting but hopefully that would not apply retrospectively to a gift already made.

by Old Mrs Landlord

8:23 AM, 7th March 2018, About 4 years ago

Reply to the comment left by Richard Adams at 07/03/2018 - 00:48
Reply to Richard Adams: yes, that's right and Asif is probably young enough for it to be a good bet. I was merely pointing out that it's not as simple and straightforward as some might think and your previous post had actually suggested giving away the property while retaining the benefit of the rent. If a person who does this lives for the required timespan of ccurse there is no problem but who can guarantee their own future, let alone government legislation? Life insurance written in trust might be something to investgate.

by AA

10:13 AM, 7th March 2018, About 4 years ago

Old Mrs Landlord - I assure you I am the extreme antithesis of anyone who tries to wing it. There are some departments I never want to lock horns with - HMRC is one. I am risk averse to the extreme. If its not belt and braces bound I do not want to know.

When Mark was advising the deed of trust arrangement with the beneficiary being different to the mortgage holder and land registry information to reduce tax , because I had read the internal instructions HMRC tells its officers, I went the long way around. Discharge loan, new loan, Solicitors fees and stamp duty.

I was merely floating an idea that needs to. have expert input to endorse or dismiss it.

Richard - becoming a grumpy old man as I appear to be is a rite of passage.


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