Like landlords, legislation comes in all shapes and sizes. Some of it is big and ‘important’, some of it small – just an addendum to something larger. The effect it has on the BTL (buy-to-let) market is not always related to its specificity.
The Renters (Reform) Bill in England is expected to impact the private rented sector – the clue is right there in the title of the Bill, whereas the sudden upswing in the ADS in Scotland was tagged onto the end of the 2024 budget almost as an afterthought.
So, when we look at how legislation affected the PRS, it’s not enough to just look at the obvious, big-ticket laws, it is also necessary to consider changes which might never have been specifically aimed at the sector, but affect it nonetheless.
All of which is a slightly long-winded way of saying that in examining the response to buy-to-let legislation, it’s important not to riff constantly about the obvious, and take a broader approach.
As professionals working within the BTL market, and with many years experience behind us, we’re well placed to offer our thoughts and conclusions on this thorny subject.

Laws and effect
It’s probably wise to try and define what we’re looking for when searching for a response to buy-to-let legislation.
In the popular press this is usually reduced to the old trope of ‘landlords quitting the market’, which, while it is a thing, is a fairly crude, not to say cliched, method of portraying the market response to legislation.
We might also look for other changes: buying more or fewer properties; levying higher rent increases, or holding back from doing so. We could look for landlords thinning the herd – selling of less well performing properties, but not quitting.
In short, looking for a single response to legislative changes is to assume that all changes can be determined from a single, crude, metric.
Exemplī grātiā – or e.g. for short
You might think it counterintuitive that an increase in tax on the purchase of additional properties might lead to investors buying more properties, but there is some evidence that exactly this has happened.
In December 2024, the Scottish Government announced a further increase in the Additional Dwelling Supplement (ADS) from 6% to 8%. Buying investment properties in Scotland was going to get more expensive.
However, MDR – Multiple Dwellings Relief still applied, therefore investors buying 6 or more properties as part of a single transaction could claim relief from this ever-increasing charge.
The upshot is that where investors can afford the higher buy-in, many are finding it advantageous to purchase portfolios of many properties rather than just one or two.
Big bills, big effects?
When the examining the response to buy-to-let legislation recently, the twin spectres of the Renters (Reform) Bill and the Housing (Scotland) Bill invariably crop up, along with discussions about how these will affect the rental sector.
Since neither of these are yet law in their respective jurisdictions, their actual effect on the market is hard to judge and subject to speculation. This is a prime example of ‘landlords are quitting the market’ reporting which is less than useful.
We’re not going to belabour these two Bills here as, like everyone else, we don’t know exactly what their final form will be, nor how or when their provisions will be introduced. We suspect we’ll come back to these in the future.
However our expectation is that the private rented sector will adapt to another new reality and carry on.
Taxing times
All taxes result from legislation although there is a good argument that any discussion of them should properly fall under the heading of ‘economics’. However since we’ve already given one example above, we’ll plough on.
It’s very much the case that most landlords and property investors get involved in the PRS in order to reap a financial reward from their investment. Anything which affects their return might therefore cause them to rethink their approach.
One of the most significant examples of tax legislation affecting the PRS was the decision to deprive landlords of the right to offset the cost of mortgage interest relief. This was embodied in Section 24 of the 2015 Finance Act.
Although landlords can still claim some relief on interest payments, this is based on the basic rate of income tax and those paying higher rates of income tax are disproportionately affected.
Needless to say this change was deeply unpopular and the responses from landlords varied from quietly seething to selling up and quitting the market.
Some reorganised their business into limited companies, which do not pay income tax, some chose just to grin and bear it. One landlord recently started a petition to repeal Section 24. This is unlikely to be successful.
Rent controls
Post-pandemic, the Scottish government introduced legislation to restrict rent increases, ostensibly to deal with the cost of living crisis which affected so many.
This temporary legislation initially prohibited rent increases and then subsequently allowed rents to be increased by a maximum of 3%.
These restrictions however only applied to sitting tenants, and not to newly-let properties, so many landlords took the opportunity to substantially increase rents when existing tenants left and the property was re-let.
The upshot was that overall, rents in Scotland increased substantially both during the period when the restrictions were in place, and once those restrictions were finally withdrawn.
Many landlords, especially those with only one or two properties, felt that the measures imposed failed to take into account that they too were subject to exactly the same wider economic forces which assailed their tenants.
Advice from the property pros
If you’re looking for evidence of the PRS responding to legislation, you’re going to see bending much more often than breaking.
Yes, there are some landlords and investors who will find a new piece of legislation to be the straw that breaks the camel’s back and will decide to leave the sector, but in our experience legislative change doesn’t lead to a large-scale exodus.
In terms of the response to buy-to-let legislation, the majority of landlords will do what they have to do to remain compliant and carry on (maybe that’s something we could put on a poster)!
Big changes like the impending loss of Section 21 evictions will occasion changes in the way the sector operates but the majority of landlords will find ways to adapt to the new realities.
In summary…
Changes within the PRS tend not to be neither seismic nor overly destructive. Politicians are aware that millions rely on the private sector for their homes therefore changes which could destroy the PRS would leave them with far greater problems.
Section 24 was felt by many to be a body-blow at the time, however the private rented sector has noticeably increased in size since 2015 despite its provisions.
Forthcoming legislation in both Scotland and England will change the buy-to-let market, but neither will doom it, as despite everything, it remains a solid investment, both for capital growth and income generation.
If you’d like to find out more about buy-to-let opportunities and want to fully understand the challenges and rewards, please get in touch to arrange a chat and to discover how we can help you navigate occasionally uncertain waters.

Written by Chris Wood, MD & Founder of Portolio
Get in touch on 07812 164 842 or email [email protected]

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