We have all been told of the housing shortage in Scotland but Build to Rent (BtR) until recently has not been embraced. BtR refers to property built for the private rental market, normally owned by an institutional landlord and managed by a single entity, often with an onsite presence. Down south it has been an established part of the property sector after the conversion of the Olympic Village in East London in 2012 and thereafter spread outwards across England but stopped short, more or less, at the Scottish border.
Arguably two matters may have held back the BtR market in Scotland; namely impending tenancy reform and the potential of a second Independence Referendum. But these fears have faded since the new Scottish Private Residential Tenancy was introduced in December 2017 and a Second Referendum on Independence is unlikely just now with the turmoil of Brexit.
At last there is recognition of a place for BtR in Scotland. Glasgow and Edinburgh meet the demographic profile that appeal to investors, relatively low unemployment and a new generation of young professionals who are less focused on owning property but equally value being able to live in modern and fashionable neighbourhoods. It also helps that Glasgow was ranked the top city in Scotland and number 5 in the UK for the retention rate of graduates (46%) who chose to remain in the city after leaving university. There is also the availability of sites located near transport links.
It is therefore hardly surprising that a growing number of investors are now targeting BtR projects in Scotland. In Edinburgh the Lochrin Quay development bought by Aberdeen Standard in 2018 was a positive demonstration of the interest of institutional investors. In January of this year Legal & General decided to invest in a 324 apartment development at Buchanan Wharf in Glasgow.
Projects such as these are driven by a rising rental market and socio-ecomomic changes in the overall context of weak housing supply, creating opportunities for developers and investors. There are further sites coming forward which may be suitable for BtR such as in Candleriggs in Glasgow and Fountainbridge in Edinburgh.
It has taken a while for there to be an acceptability and understanding of BtR but really what is there not to like about well- constructed, professionally managed homes in areas keen to welcome new housing and create communities.