DJ Alexander: Property produces major income for Scottish Government

The firm has stated that Scotland’s residential property market accounted for £571.6 million in revenues last year with the final six months alone of 2021 netting £393.5m for the Scottish government.

A total of £161.5m of last year’s revenue came from purchases by landlords, property investors and second homeowners which represents 28.3% of total income.

To date this year, the latest land and buildings transaction tax (LBTT) data shows that a further £78.4m has been generated from residential property sales. Of the sales so far this year £24.3m have arisen from landlords, property investors, and second homeowners which is 30.1% of the total.

David Alexander, the chief executive officer of DJ Alexander Scotland, commented: “These figures highlight how important the property market is in Scotland in generating much needed income. Given that the First Minister said that the recent one-off payment of under £700m for the rights to Scotland’s oceans was a “truly historic opportunity” she should perhaps reflect that income from property sales in Scotland is generating almost as much as that one-off payment on an annual basis.

“It is clear that a strong and vibrant property market is essential for the financial wellbeing of the Scottish economy. Given that almost a third of the income generated from property sales comes from purchases by landlords, property investors, and second homeowners you would imagine that the Scottish government would wish for this source of money to continue and be encouraged. Yet the reverse is true and there remains a determination to discourage this group of property buyers from investing in Scotland.

“My concern is that our vibrant and dynamic property market is being undermined by a government that wishes to vilify the private rented sector, the second homeowner, and the property investor. The problem is that if they succeed then vital revenues will be lost, there will be insufficient homes to meet demand, and the already overcrowded social housing sector will get worse.”

He concluded: “Thousands of EU nationals will be returning to Scotland this summer to live and work and they make up 40% of the tenants in the private rented sector. If the Scottish Government continues its programme to demonise the PRS in Scotland and to discourage investment, then who will provide the homes for these essential workers.

“There is no social housing available to them and even if there was there is already a waiting list of over 132,000 for these homes. With just 5,672 social sector homes completed in the last full year prior to the pandemic and only 3,785 in the year to March 2021 the Scottish Government is substantially behind in its target of building 10,000 homes per year. Yet with a rising Scottish population, a return of EU citizens to work, the Scottish Government remains determined to discourage investment in property.

“If their policies result in a reduction in the size and scale of the private rented sector, there is no plan on how to replace the 340,000 homes in the PRS and where to house the 750,000 tenants. It all sounds like a recipe for disaster.”