Welcome to Edition #9 of our Weekly Property Roundup, where we’ve done the hard work sifting through the week’s most relevant news so you as a landlord, tenant or investor can be confident you’re up to date with everything you need to know in the property world.
This week’s Top 4
New planning legislation could lead to anti-development measures
The proposed planning legislation that is currently before the Scottish Parliament, calls for a third party right of appeal. Colliers International, the real estate consultancy firm, suggest that if approved, this new legislation could lead to anti-development measures that will slow down the process and harm the system. They believe that this third party right of appeal with lead to even higher costs and longer timescales that could have a massive effect on the economy.
There is a huge demand for new properties to be built in Scotland to meet the supply, and Colliers’ Andrew McNab stated: “A major part of the problem is a ponderous and under resourced planning system, which is regularly taking twice or three times as long as it should to deliver decisions on important developments”.
Supply shortage could push rent up by 15%
As the supply of rental properties drops, rents could rise by 15% by 2023, according to the Royal Institution of Chartered Surveyors (RICS). Many small-scale landlords are pulling out of the market, due to various tax changes brought in within the last year, and there is now a call for the government to revisit the way that the private rental sector is regulated.
A Treasury spokesperson explains the reasoning behind the tax changes was to make more properties available to homebuyers. They stated: “We want to realise the dream of home ownership for a new generation, and that’s why we introduced a cut to stamp duty for first-time buyers and have built 1.1m additional homes since 2010.”
Increase in base rates leads to big banks pocketing up to £300m
The Bank of England raised the base rate last week to 0.75%, from 0.5%. As a result of this, many of the major banks could make up to £300 million by 2020, as they avoid passing on the boost to savers. Four big players, Lloyds, Barclays, Nationwide and TSB have said that they will be passing on the interest rate rise to their mortgage customers. Mortgage payers are encouraged to review the product that they’re on, as the base rate change will have seen their variable rate rise last week.
On top of this, some banks are hiking up their credit card rates and overhauling their charges for overdrafts.
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Overseas investors in Edinburgh have increased substantially in the last year
There has been a rush of foreign investors who are purchasing buy-to-let properties in Edinburgh. The number has increased substantially in the past year, as the investors move away from London. One agent has reported that 75% of buyers are from outside of Scotland.
Earlier this year, PwC showed that the number of England-based landlords registered with Scotland’s leading tenancy organisation has risen from 260 in 2012, to 1,388 in 2017. The concern is that the influx of investors could be hindering first-time buyers as the property prices in popular buy-to-let areas such as Easter Road and Leith Walk have risen by 33% in a year.