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Positivity about future of buy-to-let remains high in Scotland

New research carried out by Legal & General has revealed that brokers in Scotland are more confident about the future of buy-to-let than the rest of the UK.

The buy-to-let market has been hit by a number of government measures in recent times, in an attempt to slow its growth. This, coupled with the impending alterations to landlord tax relief (set to be phased in from 2017), has led some to question the future sustainability of investing in buy-to-let.

However, Legal & General’s research paints a different picture for Scotland, where positivity triumphs among brokers. Some 63% of brokers north of the border believe that the buy-to-let market will remain the same size as 2015.


In England, the highest levels of positivity regarding the buy-to-let sector can be found in Nottingham, where 57% of brokers predicted that the buy-to-let market would either expand or stay the same in 2016. This was followed by 49% of brokers in London.

Projections about the future of the buy-to-let market did, however, vary considerably across the UK, with some 71% of intermediaries in Manchester believing that the sector will reduce in 2016. 

“Despite a whirlwind of changes to the buy-to-let market, including the government’s stamp duty hike and the reductions in tax relief on the horizon, it’s clear that a large number of brokers remain confident that buy-to-let will remain strong in 2016,” said Jeremy Duncombe, Director of Legal & General Mortgage Club. “Though there are concerns that government interference could mean a reduction in buy-to-let activity this year, our research shows that many brokers in both England and Scotland believe the market to be well positioned to absorb the impacts of these measures.”

He added: “Even now, amid the uncertainty brought about following June’s referendum result, borrowers will be looking to remortgage their buy-to-let properties as a potential reduction in rates looms. Brokers need to grasp this opportunity by contacting their books now to ensure these individuals get the crucial advice they need when it comes to securing a better rate on their mortgage.” 

  • Commercial Trust

    In Scotland, fewer investors use interest-only mortgages than in many other regions in the UK. (CML estimates the figure is around two thirds, compared to three quarters across the UK as a whole.) This means the coming withdrawal of tax relief for buy-to-let interest poses less of a threat. Plus, lower capital values mean less overall leverage – reducing interest overheads – and mitigate the impact of the LBTT surcharge.

    But the fundamentals remain across the whole of the UK for investors to enjoy continued success. It just takes the right amount of planning and foresight, and the willingness to adapt to change and adjust strategy where required.


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