Scottish landlords are buying up record levels of property in England and Wales as they seek refuge from Nicola Sturgeon’s tax crackdown.
The proportion of Scottish investors buying properties in other parts of Britain has more than doubled since 2019, from 2.5pc to 5.3pc this year, according to Hamptons estate agents.
Scottish landlords’ purchases in England and Wales are now at their highest level since records began in 2009.
John Blackwood, of the Scottish Association of Landlords, said growing numbers of Scottish landlords are either selling up completely or opting to invest in England as an alternative.
He said: “They believe the Scottish Government is anti-landlord and anti-investing in the private rented sector.”
Mr Blackwood said there is already a shortage of rental properties and the exodus of Scottish landlords will only make matters worse.
Landlords have seen their profits squeezed by a six-month ban on rent increases which came into force under Ms Sturgeon in October last year in a bid to shield tenants from the worst of the cost of living crisis. This was accompanied by an eviction ban which landlords say is making it harder to evict problem tenants.
Last week the Scottish Government revealed plans to extend the measures until September. However, unlike the current rental freeze, private landlords will be allowed to increase rents by a maximum of 3pc during the six-month period.
In certain circumstances, such as where mortgage payments or service charges have drastically risen, landlords will be able to apply to the Government for a rent rise of up to 6pc.
Scottish investors have also been stung by an increase in the tax paid when purchasing second homes, which has jumped from 4pc to 6pc. In England the surcharge for second home buyers is 3pc.
These charges are on top of the taxes paid on all home purchases, which are already higher in Scotland than in England.
Chris Norris, of the National Residential Landlords Association, said the climate in Scotland has been increasingly difficult for landlords since 2017, when no-fault evictions were banned. These evictions remain in place in England, although there have been proposals to scrap them.
Landlords in England face their own difficulties, but Mr Norris said there is “nothing quite as severe” as the measures in Scotland.
He said: “At the moment it seems like there's no light at the end of the tunnel for landlords with properties in Scotland.”
Most Scottish landlords who are buying in England and Wales are choosing Northern England, which accounts for 80pc of their purchases, according to Hamptons.
Mr Norris said this was likely because properties are cheaper to buy in Northern England and yields tend to be highest there. Many landlords like to live near the properties they own, so the area’s proximity to Scotland is another appealing factor.