Hazel Sharp Webb on the BTR Forum Scotland
My Twitter finger is still in recovery after yesterday’s third annual Movers & Shakers’ Build to Rent (BTR) Forum Scotland in Edinburgh.
As always, the Forum was well attended by agents, solicitors and even government agencies and policy makers, although there were relatively few developers or prospective investors, and the banks were notable by their absence.
The official launch on the day of the Rental Income Guarantee Scheme (RIGS) and ‘The Build to Rent Opportunity in Scotland’ publication commission by government, were well received. It sends a positive message, following soon after the new planning advice note for BTR was published, that Scottish Government is intent on encouraging and growing the BTR sector in Scotland. All in all, some real progress and positivity was evident relative to last year’s forum.
Having said that, the proof of the pudding is, as they say, in the eating (implementation), and this is where the delegates were far less positive, and some even cynical. I have to admit to sharing their frustrations when it became clear that, at a local authority level (save for Dundee), there remains a very real misunderstanding of BTR and the purpose of rent pressure zones (RPZs).
It seems BTR is viewed by some as a rental product only for “yuppies” – a word I haven’t heard used since the 1980s! BTR is, at its core, simply housing which is purpose built for private rent. Very few will be ‘premium’, with onsite concierge or amenities. The product, and the extent of ‘added extras’, will be driven entirely by the target resident profile in any given area. There is a significant dearth of rental property for those that are earning too much to qualify for social or mid-market housing and can’t afford to buy. BTR can satisfy that need.
There is a misconception that designating an area a RPZ, will address concerns over affordability. However, any cap imposed, will not affect new tenancies, since these will continue to be market led. A lack of supply to meet demand will drive up price. Local authorities need to recognise that an increase in supply (across all tenures) is what is needed, and that BTR is actually an economic development tool. As Matthew Benson so eloquently put it yesterday, “£1bn of investment in BTR would be worth over £130m in tax to the Scottish economy”.
The necessary element of delivering a high quality, BTR product in Scotland, is the collaboration of the private and public sectors and most importantly support coming from the local authorities. I am sure there is not deep-rooted institutional bias against the private rented sector, and so education is the key. This can’t be left to the private sector alone, for fear of having ulterior motives. So might Scottish Futures Trust (SFT), custodians of the RIGS, be best placed to educate local authorities? We at Rettie will do all we can to support in this quest, should someone accept the challenge and pick up the chalice.
And last but not least, the final piece of the jigsaw, data, or should I say, lack of it. The need for private rental market data to better inform decision-making at a local and national level, is neatly summed up in a blog by the Office for National Statistics (ONS) today. Read the blog here.
We can do this Scotland!
For more information on Rettie & Co.’s BTR Services go to https://www.rettie.co.uk/pages/build-to-rent You can also find our recent full market review of the BTR sector in Scotland here.
Hazel Sharp Webb MRICS
Head of PRS & BTR Services