Harnessing Investment to Meet Growing Rental Crisis
The UKAA, the membership organisation for the UK Build to Rent (BTR) sector is urging newly elected Scottish Councils to embrace investment in build to rent and co-living to help address the current housing crisis, addressing nationwide shortages of rental stock and providing additional housing supply to help meet housing targets.
Data from the Royal Institution of Chartered Surveyors (RICS) shows that in Scotland demand for rental housing had risen by over a third in the last three months, while supply had dropped by around 50 per cent, leading to an expectation that rents in Scotland will rise faster than in England and Wales.
Gillian McLees, UKAA Scotland Chair and Director of BTR at Rettie & Co., commented:
“2022 is set to be a pivotal year in the BTR sector in Scotland with the launch of landmark schemes to the public and long awaited buildings becoming operational. The UKAA and the UKAA Scotland Steering Committee are committed to the success of this sector and providing the rented homes that Scotland desperately needs.”
What is BTR?
BTR is a relatively new model for creating new homes in the UK, where all the properties are built for rent, not for sale and are located in close proximity to amenities, places of work and transport links.
Co-living is a type of communal living in which residents get a private bedroom, with the opportunity to share meals and discussions in common living areas.
Residents of BTR/co-living are offered long-term security of tenure, with the flexibility of renting and have access to wider on-site amenities, such as gyms and community space, extending beyond the traditional boundaries of an individual housing unit.
With a lack of high quality private rented sector housing available on the market, BTR and co-living offer a solution to this.
BTR and co-living are especially attractive to a younger demographic, for whom there is a huge demand for a new form of housing.
Adopting BTR and co-living will aim to ensure that Scotland’s cities remain competitive with other big cities in the UK that are attracting billions of pounds of investment. Currently lagging well behind these, BTR north of the border offers the opportunity for high quality residential development.
While the planning pipeline in Scotland has grown 69 per cent since Q1 2020, bringing the total headline figure to 12,245 homes, the sector however remains nascent, with just c.1,000 homes currently operational. This accounts for just 1.4 per cent of all completed BTR homes in the UK. There is however the potential for the sector to reach over 100,000 homes at full maturity, a third of private rented sector (PRS) households.
The pipeline in Edinburgh and Glasgow represents 6.7 per cent and 10 per cent of current private rented sector households, respectively. There is great capacity for growth given the pipelines in Manchester, Birmingham and Leeds represent 29.6 per cent, 15.5 per cent and 13.1 per cent of current PRS households.
BTR schemes in Glasgow include proposals for 324 homes at Buchanan Wharf and 685 BTR and co-Living homes at Portcullis House, with 338 homes at Skyliner and 476 homes at Fountainbridge in Edinburgh.
While the focus is currently on Edinburgh and Glasgow to host BTR/co-living, both Aberdeen and Dundee are being highlighted as potential locations for future supply. Indeed, Scotland’s first institutionally funded BTR development was in Aberdeen.