Rural Landlords in Crisis: Insights from Argyll and Bute's Private Rented Sector

A new study on the private rented sector (PRS) in Argyll and Bute, Scotland, reveals a set of deep-rooted problems threatening rural housing stability. The report, “The Challenges Faced by Rural Landlords: The case of Argyll and Bute,” by Dr. Andrew Robert Watson, is the first major investigation into rural landlordism in Scotland.

Housing Emergency Declaration

On June 12, 2023, Argyll and Bute became Scotland’s first local authority to declare a housing emergency. This declaration captures the severity of the situation, which the report links to problems worsened by the current economic climate.

The Argyll and Bute Council Team Lead on Housing Strategy describes the layered nature of the crisis:

We’ve taken a whole housing market approach […] There are pressure points right across the housing market - not enough properties for sale; not enough private developers wanting to build for speculative sale […] [We’ve seen a] 29% increase in homelessness in 22/23, an 8% increase in the number of households on the social housing waiting list, and a 20% increase, at least in construction costs.

Private Rented Sector: A Critical Component

The PRS accounts for roughly 10% of households in Argyll and Bute and plays a major role in rural housing. But it faces serious challenges that threaten both its stability and its capacity to grow. Demographic Profile and Investment Returns

The study finds that most landlords in Argyll and Bute are small-scale, part-time investors. 39% are aged 65 or older. This aging demographic raises real questions about long-term sustainability. The financial picture is also grim: over a third of landlords (36%) achieve a net yield of 3% or less.

One landlord, identified as Steve, comments:

I don’t think that 4% return is actually adequate… for investment like that, we are taking a certain amount of risk.

Challenges facing Rural Landlords

The report identifies a web of problems confronting rural landlords in Argyll and Bute. Many are made worse by conditions specific to rural property management. These affect not just landlords’ finances but also housing availability and community survival.

Maintenance and Property Upkeep

Rural properties often present particular maintenance difficulties because of their age, construction methods, and exposure to harsh weather. One landlord puts it plainly:

Trying to get rural properties up to specific standards of insulation is almost impossible. 90% of the rural properties have been built in the 1800’s, and not in the twentieth or twenty first centuries and they’re not the easiest of properties to insulate. Yes, it can be done but the costs are absolutely prohibitive.

The report describes these difficulties as compounded by a “rural maintenance premium,” reflecting the higher costs and logistical challenges of carrying out repairs in remote locations.

Scarcity of Skilled Tradespeople

The shortage of qualified tradespeople emerges as a serious problem with wide consequences. It delays repairs and stops landlords from meeting regulatory requirements. One landlord describes it:

You just shout and hope that they’ll come, you just have to keep phoning and phoning and texting. Sometimes they don’t even reply. The hassle in getting a tradesman stresses me out.

The shortage is worst in island communities, where bringing in mainland tradespeople adds considerable extra cost.

Regulatory Compliance and Legislative Burden

The growing weight of regulation is a major concern. 62% of landlords feel the current legislative environment does not support PRS investment. Many express frustration at what they see as policymakers’ lack of understanding about rural property realities. One landlord says:

I think the Scottish Government is very close to triggering a total collapse of the PRS some would say that is maybe what they are trying to achieve.

Energy Efficiency Requirements

Coming energy efficiency regulations are a source of real anxiety, with 43% of landlords naming this as their top concern about future legislation. The report documents the practical and financial difficulties of upgrading older properties to meet these standards.

A landlord explains:

I can’t see what I can do to get it to a C [EPC rating]. The man from [a local surveying company] that did it, he was very helpful. He said I would need to take the internal walls down to the lathe and plaster and I would have to bring them in to make space for more insulation… Now, that’s a major disruption for a tenant.”

Economic Viability and Return on Investment

The financial case for PRS investment is weakening. Over a third of landlords get a net yield of 3% or less, barely keeping pace with inflation and falling short of returns available from other investments.

One landlord comments:

We’re certainly now at the stage where our wealth is diminishing rather than increasing. And that that’s because of the changing economics of the private rental sector.”

Rural Infrastructure and Services

The report also notes infrastructure problems, including transport and access to services. These affect landlords’ ability to manage properties and tenants’ willingness to live in them.

A landlord explains:

Access is a great difficulty. You cannot rent a flat in this area unless you’re on a bus route because people renting flats would have to have a car that can’t necessarily afford a car.

Demographic Pressures

The aging landlord profile poses a looming problem. With 39% of landlords aged 65 or older, there are obvious questions about succession planning and the PRS’s long-term future.

One landlord reflects:

We are not young and fit any more and not able to respond in the way we’d like to, were trying to be supportive landlords, you know, supportive- maintaining a safe environment for people.

The overlapping challenges facing rural landlords in Argyll and Bute point to a sector under real strain. Maintenance difficulties, trade shortages, regulatory pressure, and thin economic margins are all squeezing landlords. This threatens their investments and, by extension, the supply of private rented housing in rural areas.

Addressing these problems will require policy interventions that recognise rural landlords’ specific circumstances. The report argues this demands collaboration between policymakers, local authorities, and everyone with a stake in the sector.

Legislative Environment and Government Understanding

The report shows a clear disconnect between landlords and policymakers. 62% of surveyed landlords believe the current legislative environment does not support PRS investment. 74% say the Scottish Government does not understand the challenges rural landlords face.

Key Challenges Identified:

• Property Maintenance: Older rural buildings create particular maintenance problems, especially around energy efficiency upgrades.
• Skilled Labor Shortage: Too few tradespeople in rural areas drives up costs and delays repairs and compliance work.
• Energy Efficiency Regulations: 43% of landlords identify coming energy efficiency requirements as their primary legislative concern.
• Rural Infrastructure: Transport limitations and poor access to services create further obstacles for both landlords and tenants.

Sector Stability Concerns

The report’s most alarming finding is that 33% of landlords plan to sell some or all of their properties. This potential exit could seriously reduce rural housing supply. Landlords point to the accumulated weight of legislation, rent controls, and rising costs as their main reasons for getting out.

Recommendations

The report offers targeted recommendations:

• Citizens Advice Scotland:
  • Improve landlord-focused services and content
  • Carry out additional evidence-based research on the sector
• Argyll and Bute Council:
  • Improve communication with landlords
  • Strengthen enforcement
• Scottish Government:
  • Clarify the PRS’s role in housing strategy
  • Improve sector data collection
  • Consider direct landlord representation in policy-making
  • Review current and proposed legislation
  • Address skilled labour shortages
  • Provide clarity on energy efficiency improvement funding

Conclusion

This first study of rural landlordism in Argyll and Bute reveals a sector under serious pressure. The problems range from property maintenance and legislation to economics and demographics, and they interact in ways that make each worse.

Action from policymakers, councils, and sector stakeholders is needed to address these challenges and protect the PRS in rural Scotland. Without it, the housing emergency will deepen, with consequences felt across rural communities.

The full report, “The challenges faced by rural landlords: The case of Argyll and Bute”, is available on the UK Collaborative Centre for Housing Evidence website.