Despite the summer season, the Scottish BTR sector is experiencing a somewhat gloomy 2023, but there is still hope for an Indian summer.

For Scotland’s Private Rental Sector (PRS), the current negative sentiment from many international institutional investors, despite the market leading performance of current schemes and strong underlying market fundamentals, is a major concern. As many individual private landlords have been effectively legislated out of viability by a succession of changes to regulation within the sector, from removal of tax reliefs to the second increase of ADS to 6%, it was hoped that institutional investors would step in to fill the shortage of housing in the PRS. However, political intervention in the sector has exacerbated the crisis.

While this may be a rather pessimistic picture of the Scottish PRS and BTR sectors, the current market also has the potential to deliver opportunity for bold investors.

A Huge Opportunity Hanging in the Balance


There is an estimated £3.2bn in development value in BTR & MMR units that are in developments identified in the pipeline, which are either in the pre-planning or planning stages but have not yet committed to construction. These developments total around 14,218 new homes which currently may or may not be delivered. Based on the Homes for Scotland “The Value of Residential Development” Report, which estimates 4.1 jobs per house, this would generate the equivalent of 58,293 jobs over the construction period.

As many private landlords have been effectively legislated out of viability by a succession of changes to regulation within the sector, from removal of tax reliefs to the second increase of Additional Dwelling Supplement (ADS) to 6 per cent, it was hoped that institutional investors would step in to fill the shortage of housing in the Private Rental Sector. However, a number of factors including political intervention in the sector, continues to exacerbate the situation. This means that many people in acute need often cannot be accommodated in the properties we manage. We would love to accommodate them, but there just is not the stock.

Gillian McLees
Director of Build to Rent Operations