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Pagan Osborne sees Buy-to-Let increase as rental market booms

Enquiries for investment or buy to let properties at legal, financial and property company Pagan Osborne have risen 25 per cent in just the past two months.

The firm, which has offices in Edinburgh and Fife, also seen a 10 per cent increase in the number of rental properties on its books over the last 12 months, with St Andrews providing some of the more attractive returns due to demand from people re-locating and the city’s student population.

With one in eight home loans – around 1.5 million across the UK – allocated for rental properties, according to the Financial Services Authority, it all seems to be pointing to a ‘buy-to-let’ boom.

Linda Black Lettings Manager for Pagan Osborne says that many people are drawn to buy-to-let as an attractive investment with house prices and interest rates comparatively low; while many others are deciding to rent instead of selling. However, while entering the buy to let market can be a very rewarding, all would-be landlords need to enter the market with their eyes wide open.

As well as understanding what makes the right rental property, there are legalities and responsibilities to owning a buy-to-let home and now HMRC is turning its attention to landlords’ tax returns, with the announcement that it has set up a specialised taskforce.

Linda said: “It is important to get expert help in identifying a property which will let easily; ask for guidance on the type or length of leases available and legal compliance. But there are also costs associated with being a landlord from dealing with emergency repairs and maintenance through to covering a mortgage during the months a property is un-let. New landlords have a lot to consider alongside the potential gains.”

Rental income is also subject to income tax and landlords can expect to pay tax at 20%, 40% or 50% depending on their other sources of income, which will impact the net return.

Fiona McDonald, partner and tax expert at the firm, added: “When considering purchasing property to rent out it is important to consider the tax implications. Addressing these correctly ensures that you will not face interest, penalties or prosecution. An individual must advise HMRC if they become a landlord and they will be brought within the Self Assessment tax regime.

“Completing a tax return can be a burdensome exercise as it requires good record keeping.  HMRC can request papers and landlords should ensure that they keep all receipts and report details based on the tax year which always runs from 6th April to 5th April.

“Additionally, landlords need to bear in mind the potential CGT implications on selling their rented property. Capital gains tax will be due on the increase in value since acquisition although personal CGT allowances may be available ad certain expenses can be deducted.

“Taking advice before purchase is essential as there can be opportunities for tax savings if the ownership of the property is structured well giving consideration to the tax rules and available allowances.” 

Pagan Osborne offers a free ‘letting talk through’ for those considering purchasing a buy to let, sharing its expertise on choosing rental properties and managing them through its estate agency and lettings service. All compliance matters are managed by Pagan Osborne Lettings on behalf of owners within their full management service. The all-service company also offers tax planning advice and legal guidance.


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0131 624 6820 for Edinburgh or 01334 475001 for Fife to discuss your needs.

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Want to work with a local, friendly company? Then find your nearest Pagan Osborne office to you below. However, we also work with clients throughout the UK so you can call any of our numbers and our helpful reception staff will be happy to forward on your call to the most appropriate expert to suit your needs.

Clarendon House
116 George Street
EH2 4LH Call Us
Tel: 0131 624 6820
Fax: 0131 220 1612
2 Comiston Road
EH10 5QE Call Us
Tel: 0131 539 3333
Fax: 0131 538 7204
St Andrews
106 South Street
St Andrews
KY16 9QD Call Us
Tel: 01334 475001
Fax: 01334 476322
12 St Catherine Street
KY15 4HH Call Us
Tel: 01334 653777
Fax: 01334 655063
1 Crossgate
KY15 5HA Call Us
Tel: 01334 656525
Fax: 01334 654119
Pagan Osborne
5a Shore Street
KY10 3EA Call Us
Tel: 01333 310703
Fax: 01333 311918


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