In our previous BTR Market Briefing from late 2024, our big ask was for the Scottish Government to introduce revisions to its Housing Bill to breathe new life back into the sector. Commendably, the Scottish Government did listen to us and the wider sector, with an exemption from the Bill’s provisions for the BTR and Mid Market Rent (MMR) sectors. The Government also worked closely with the industry to deliver its Housing Investment Taskforce report, which hopefully provides routes to unlocking more institutional investment into new housing in Scotland over the longer term. We believe the rent control exemptions in the recently passed Housing (Scotland) Bill could assist in leading to £2.8bn in economic development and up to 50,000 new construction jobs.
Glasgow City Council’s embracing of the Co-living concept (which offers private, often small en-suite, bedrooms combined with extensive shared areas for community interaction) is another positive intervention. This should help with the Council’s strategy to have a thriving residential sector in the heart of the city (as the likes of Manchester have achieved).
However, market conditions to deliver BTR are undoubtedly tougher now than a few years ago, with affordability pressures and rising construction, finance and regulatory costs, which have particularly impacted the multifamily (urban high-rise apartment) market. While single-family housing (SFH) BTR (typically houses in suburban areas) has significantly increased in the UK as an industry pivot, Scotland has lagged behind and only has a handful of SFH schemes. Nevertheless, there is investor demand for such schemes here and it is hoped that the more acceptable regulatory environment in Scotland now can accelerate its delivery.