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The Cabinet Secretary for Finance, Economy and Fair Work, Derek Mackay, has proposed increasing the rate of ADS from 3% to 4%. If approved by the Scottish Parliament, this will take effect from 25 January 2019.
ADS rates for transactions on or after 25 January 2019
ADS is 4% of the ‘relevant consideration’ (usually the purchase price).
ADS rates for transactions prior to 25 January 2019
ADS is 3% of the ‘relevant consideration’ (usually the purchase price).
Visit Government website to find out more
75% LTV = 29% deposit
Sorry, could you expand on that ? I've also got my eye on ADS for near future purchases.
The previous link gives quite a lot of information. This is an additional cost to the BTL investor. £100k house that requires a 25% deposit, actually requires 25% (£25k) + 4%(£4k) = 29% (£29k) deposit. So a cost increase of £1k or (1%). Looks to me like it will be happening on Friday - https://sp-bpr-en-prod-cdnep.azureedge.ne...2019R1.pdf
Right, the anti-landlord wave continues...4% ouch.
For those that are looking to source below market deals and investments to combat this increase just let me know. I have a property for sale at £25k below home report value in Leith in Edinburgh. Looking for £150k and valued this week at £175,000. If of interest feel free to get in touch. email@example.com.
Did the 4% come in then after the 25th ?
The 4% coupled with rent controls, and other new rules means there is no room for error for landlords up north !
I think I read on here there was a net sell-off in Scotland of BTL but that may be a combination of above plus the phase out of mortgage interest relief as multi-portfolio
landlords are seeing things no longer stack up. Even with this, I think the Scottish residential market has not run out of steam with some flats in an area I'm looking at selling
in under a month with under-supply in that area.
Capital growth however pales in comparison to my what my friend bought just outside London in 2012 for the same money down.
Anecdotally, we do hear of more landlords pulling out of the market - but quite frankly, many of those landlords were amateur / accidental / rogue and perhaps shouldn't have been in the market in the first place. Hopefully this will prevent professional landlords with an investor mindset, who take a long term view, being tarred with the same stick.
LETS MAKE HOMES by treating landlords as partners, tenants as customers & every property as our own."
Yes, Edinburgh can be very good for capital growth, but pretty poor for yield.
Coming up with deposits is a real struggle, even with a decent paying job and a few properties in the portfolio. It gets worse the more expensive the property, when adding in another 4% of ‘dead’ money.
Agree with your views on Edinburgh market. It's a different world out there. Yields very low and capital growth fragile. In our experience, tenants tended to be highly mobile making 'churn' high and unpredictable with all the associated, unplanned costs which helped wipe out already wafer thin margins.
Although our business is focused in Lanarkshire, we agreed to manage a handful of properties for existing customers. But we've made a strategic decision to pull out of Edinburgh market and stick to our areas of expertise. Low churn, stable, rent-paying, trouble-free tenants who generally look for long-term leases. We prefer lower capital growth but higher yields and stable leases. Not as sexy but more profitable in the long run.