Scotland’s largest membership organisation for landlords has strongly criticised UK Chancellor of the Exchequer, Phillip Hammond MP, for not reversing tax changes which will result in a reduced supply of affordable housing in Scotland.

Landlords had called on the UK government to reverse tax changes brought in by his predecessor which will see landlords taxed on their income rather than profit, the only businesses to be treated in this manner.

These taxes will significantly increase costs for landlords in the Private Rented Sector (PRS). This will lead to increased rent levels, driving those on lower incomes in to the arms of rogue landlords with unsafe properties or to local authority housing services which will be unable to cope with increased demand.

John Blackwood, chief executive of the Scottish Association of Landlords (SAL), said: “The Scottish Government has taken a number of positive steps to try and solve the housing crisis in Scotland although more needs to be done. However, all of that work is undermined by the tax regime being imposed at Westminster.

“By taxing landlords on their income rather than profit the UK government is punitively punishing a sector whose investment would be a key part of providing additional housing in Scotland. Rather than freeing up housing as the Chancellor might intend, these misguided changes will put the squeeze on investment and reduce the supply of affordable housing in Scotland.

“As these tax rates begin to bite this year, landlords will be forced to increase rents to cover the dramatically higher costs. Sadly, this means those on the lowest incomes will be the hardest hit as they cannot afford to pay more for housing, potentially increasing the burden on council housing services at a time when they too are under severe financial pressure. Landlords and the wider PRS are critical to increasing the supply of housing but with these tax rises the UK government risks undermining all of the progress made in Scotland.”