The number of landlords in Scotland fell sharply. Higher taxes and stricter regulations forced many to exit the market. Data shows a 10% decline in registered landlords since 2017.

Why Are Landlords Leaving?

1. Tax Changes—The Scottish Government increased the Land and Buildings Transaction Tax (LBTT) for second homes. The Additional Dwelling Supplement (ADS) now adds 6% to purchase costs.

2. Rent Controls – Scotland introduced temporary rent freezes in 2022. Caps limit annual increases to 3% in most areas.

3. Regulatory Burden – Licensing schemes require more paperwork. Short-term let rules demand extra compliance.

Impact on the Rental Market

• Fewer Rentals – Landlord exits reduce available properties. Edinburgh’s rental stock dropped 15% in 2023.

• Higher Rents – Scarcity pushed prices up. Average rents rose 12% year-on-year.

• Investor Shift – Many landlords switched to short-term lets or commercial real estate.

What Happens Next?
The Scottish Government plans further reforms. A proposed Housing Bill may introduce long-term rent controls, which analysts warn could accelerate landlord departures.

Investors must adapt or exit. The market favours large-scale operators over small landlords.