Changes to Scottish tenancy agreements will affect buy-to-let investment
New residential tenancy agreements are to be implemented, in Scotland, in January 2018, reflecting changes to the length of tenancy agreements.
For tenants, lease agreements will be indefinite, unlike the original six or twelve-month minimum term. This will allow tenants to give notice to end their tenancy at any time, provided they give one months’ notice.
However, landlords are committed to honouring the initial fixed period of either six or twelve months.
The new legislation will particularly impact the student accommodation sector, as it may result in student properties becoming available at times of the year where there is no market to secure replacement tenants.
Student property has a fixed calendar which works in line with the academic year. If a student was to vacate a property mid-term it would be very difficult for a landlord or agent to replace the student, resulting in void periods that the landlord has no control over.
Rob Trotter, associate director of DJ Alexander property managers, commented: “HMO properties are advertised well in advance to secure tenants for the next academic year.
“By binding tenants to fixed term leases we have always ensured no loss of income for landlords and avoided properties coming available out-with the annual academic cycle. Under the new legislation letting agents and landlords will not be able to ensure this anymore”.
Edinburgh has typically been an ideal location for buy-to-let investors, with a large volume of tenants looking for property and demand exceeding supply. However, with the changes to legislation and the increase in high spec purpose built student accommodation, landlords will need to ensure their rental properties are up to standard.
Modern furniture, redecorating or upgrading of fixtures and fittings will not only increase rental values, but also present the property as a more attractive option for prospective long term tenants.
Full article is available on Residential landlord: https://residentiallandlord.com/scottish-tenancy-changes-hmo-investment/