Mortgage market associations have called on the next Scottish government to put tackling problems in the housing market top of its agenda, as the country heads to the polls on 5 May.
Voters north of the border look set to return the incumbent Scottish National Party, which has been dominant across the country since it swept to power back in 2007.
The mortgage community has been voicing its wish-list for the new government, on property taxation, regulation of the buy-to-let sector and rent caps.
Of the three main parties’ pledges, the SNP plans to introduce a Land and Buildings Transaction Tax on second homes, along with legislation to limit landlords to only increase rents once in any 12 month period and let local authorities set caps on rent rises.
In contrast the Scottish Conservative Party has suggested rent is not actually rising because sitting tenants are keeping rents stable, and may actually rise annually under the SNP’s plans.
Meanwhile, the Scottish Labour Party has committed to supporting first time buyers with grants of up to £3,000, providing applicants save into an Isa. The Scottish Liberal Democrats pledged to continue supporting the Help to Buy scheme and looked introduce a Help to Renovate loan.
CML Scotland’s senior policy adviser John Marr said the new government will need to focus on implementating major changes to the private rented sector introduced through the Private Housing (Tenancies) Act.
“This challenges the buy-to-let sector with measures preventing landlords from stipulating a minimum tenancy term, and allowing tenants to terminate their rental agreement with just 28 days’ notice. It will also enable the government to cap rents if it thinks they are too high.” he told delegates at the Council of Mortgage Lenders inaugural meeting of its new Scottish stakeholder forum.
Overall the reforms affecting landlords could restrict provision in the private rented sector and hamper government aspirations to increase housing supply, according to CML Scotland.
As well as changes in the Act, landlords acquiring new properties must now pay higher rates of land and buildings transaction tax.
Association of Mortgage Intermediaries’ chief executive Robert Sinclair shared many of CML’s concerns.
“Changes to tenants rights and stamp duty taxes have the potential to put the rental market at risk in Scotland, with the very real possibility of arbitrage across the border in terms of the buy-to-let market,” he said.
He added house building is also a concern. Funding for schemes like Help to Buy is lower north of the border, he said, adding it does not appear to be top of the SNP’s agenda.
The Building Societies Association stated it is looking to involve the new government in conversations about the need for retirement homes and housing options, the need for regulation that encourages innovation and the need for there to be a range of tenures available in the housing market.
William Hunter, director of Edinburgh-based Hunter Wealth Management, commented that buy-to-let changes are already driving people to consider limited company vehicles in order to offset costs.