Thursday, 7 August 2014

Renting and Letting in Scotland what could happen next?

With the vote on independence on the 18th September not far away, various landlord magazines are full of articles on Scotland and the Scottish rental market.

One observation I cannot find anything about yet is the tax situation. Presumably if the "Yes" vote wins and Scotland becomes an independent country next March them any landlord living in Scotland who owns a property in what is left of the UK will be treated by HMRC Customs and Revenue as an "Overseas Landlord". The effect being that unless the landlord obtains a NRL8 approval under the FICO system then any agent (or tenant if rental is paid to the landlord direct) will have to withhold an amount for tax.

No doubt a similar arrangement will be in place in an independent Scotland with the landlord who lives in Scotland owns a property in England, Wales or Northern Ireland. It would be interesting if HMRC has already been making plans.

Flicking through the July / August 14 edition of the NLAs "UK Landlord" magazine I see that New electrical safety requirements are due to be introduced now that the Scottish Parliament has given its support for the "Housing (Scotland) Bill". Landlords with properties in Scotland will have a duty to ensure regular electrical safety inspections and also under gas regulations must fit carbon monoxide detectors in their properties.

RENT CAPS: - Members of the Scottish Parliament have voted against a move to introduce rent caps that had been proposed by the Scottish Labour Party.

However once the "Housing (Scotland) Bill" has received the Royal Assent later this year, it will introduce a mandatory register of letting agents together with a letting agent code of practice. 

Since 2006 all landlords who let out property have to be registered with the local authority in which the property is situated in. It is an offence not to be registered and the registration lasts for three years.

Tenant fees are no longer charged by letting agents in Scotland and it would be interesting to know if rents have increased so that landlords can cover the cost of the agent taking up professional referencing.

Finally a dedicated PRS - Private Rented Sector Champion will take forward the findings of a specialist project looking at how new sources of housing investment can be attracted to Scotland to help expand the country's growing rented sector. 

The Scottish Government is supporting the appointment by industry body Homes for Scotland in order to spearhead the growth of new rental developments to help meet the country’s diverse housing needs.

The announcement follows major research, led by Homes for Scotland and undertaken by experts in housing finance from the world-renowned Cambridge Centre for Housing & Planning Research and LSE London, which called for the two year funding of a “champion” to deliver on the recommendations contained within the project report.

These focus on improving information on the opportunities that exist, smoothing the path for development, matching institutional investment and management.

Reporting directly to Homes for Scotland, the PRS Champion will chair a Working Party with the objective of identifying and facilitating viable projects. More on this here

What will happen with Landlord and Tenant insurance products if the "Yes" vote wins next month is another question. Presumably as most of the companies involved already operate in Scotland it will be business as usual, but with adjustments to policies. Companies like Barbon's Letsure have been based in Scotland for years.

In the meantime if you own a property in Scotland or rent one and are looking for insurance take a look at this page. If you own a holiday home then take a look here


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