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The Herald Scotland

ADS fails to stall property portfolio market

This distinction has helped insulate the portfolio sales market from the wider slowdown seen elsewhere. Investors who are acquiring at scale remain active and interested in Scotland, particularly when there is an opportunity to purchase income-generating assets in one move. In Scotland, much interest comes from London-based actors for whom the differences in yield between Scotland and their own turf have been an eye-opener in recent years. For instance, rentals in the outer circle of central London might hover around 3% to 4% on a good day while, in areas of Scotland such as Lanarkshire and the Borders, yields can float up to an attractive 15%. And there are fewer pitfalls around leaseholds and service charges. The market has also seen a shift in the type of seller coming forward. Many landlords are now re-evaluating their long-term position in light of increased regulatory and financial burdens. The combination of higher taxes, changes to energy standards, and ongoing rent control conversations has led to a rise in interest from landlords considering partial or full portfolio disposals. There's no question that some of the headline tax changes have created uncertainty, but that uncertainty hasn't translated into a collapse in demand for portfolios. On the contrary, buyer appetite remains strong for well-located, fully-let residential portfolios, particularly in areas with a history of stable yields and lower void rates. That's especially true where sellers are able to present clear financial data and compliance documentation, helping de-risk acquisitions for institutional or professional buyers. It's also worth noting that the fundamentals of residential property remain intact. Demand for rental property across Scotland continues to exceed supply, particularly in urban areas and commuter belts. This provides confidence to buyers acquiring tenanted portfolios, even as the tax and policy landscape evolves. What we're seeing now is a bifurcation in the market: individual buy-to-let acquisitions are slowing due to the increased cost of entry, while portfolio sales remain active because they operate under a different financial logic, and often a different tax structure. For professional investors, the long-term view is still compelling, particularly when opportunities arise to purchase multiple units in a single transaction with an established rental history. In short, while the residential market is experiencing a period of recalibration, the portfolio sales sector in Scotland remains dynamic. The exemption from ADS at the 6+ unit level offers a significant structural advantage, and as more landlords explore strategic exits, we are likely to see further movement and consolidation within this part of the market. Duncan Ure is Director of The Portfolio Brokers, specialists in off-market property investment Agenda is a column for outside contributors. Contact: agenda@