15th April 2026
Landlords in Scotland and especially in the Highlands are selling up in significant numbers, and the reasons are even sharper than in the rest of the UK.
The combination of rising mortgage rates, higher operating costs, new regulations, and rural‑specific pressures has pushed many small landlords to exit the sector.
Scotland-wide
A clear landlord exodus.
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Citylets' 2025 analysis shows a declining supply of rental properties because many landlords are leaving the market due to financial and regulatory pressures. Rising mortgage rates and maintenance costs are being passed on to tenants, but not enough to restore profitability. Stricter regulations and tax changes have also made renting less attractive.
Key pressures across Scotland include:
Higher borrowing costs as mortgage rates rose sharply from the lows of the 2010s.
Higher taxation, including the Additional Dwelling Supplement and reduced mortgage interest relief.
Energy efficiency requirements, which require costly upgrades to meet EPC standards.
Longer tenancies and reduced flexibility under Scotland’s Private Residential Tenancy system.
These factors have pushed many landlords to sell, reducing rental supply and driving rents higher.
Highlands
The pressures are even more acute
The Highlands face all the Scotland‑wide issues plus rural-specific cost pressures.
What the data shows
Average private rents in the Highland & Islands area rose 4.1% in 2026, higher than the Scottish average of 2.4%.
House prices in Highland rose 3% year-on-year, meaning many landlords see an opportunity to exit while prices are still rising.
Why Highland landlords are selling faster
Higher transport and contractor costs make maintenance more expensive than in the Central Belt.
Limited local trades availability means repairs take longer and cost more.
Higher insurance premiums in rural and coastal areas.
Lower competition among letting agents, often resulting in higher fees.
Tighter margins because rents, although rising, do not keep pace with the increased cost base.
In short: the rural premium hits landlords just as hard as tenants.
What this means for the Highlands rental market
Supply is shrinking as landlords sell, and most ex‑rental homes do not return to the rental market.
Competition for remaining rentals increases, pushing rents up further.
Tenants face fewer choices and more instability as properties are withdrawn from the sector.
Local workers—especially in health, education, and hospitality—struggle to secure housing, worsening recruitment issues.
The bigger picture
Scotland’s rental market is being reshaped by:
Higher mortgage rates
Higher running costs
More regulation
Rural cost pressures
Landlords exiting in large numbers
The Highlands feel this more intensely because every cost—fuel, materials, labour, insurance—carries a rural uplift.