Last week the Build to Rent Forum hosted a one-day conference in Edinburgh. Both the event and the range of speakers, including Kevin Stewart MSP – the Scottish Government’s Minister for Local Government and Housing, who delivered the keynote address – highlight the enthusiasm and interest there is in the country for Build to Rent schemes.
There’s plenty of demand because Scotland’s traditional housing market, particularly in the major cities, no longer works for many people. Very few meet the qualification criteria for social housing, and private sector rents are often unaffordable, leaving vast numbers stuck in the middle, unable to buy and with no suitable properties to rent.
In the past, this has often been seen as a problem for the younger generations, whose needs have been largely dismissed because they’re expected to flat share, change jobs and stay mobile. Increasingly, however, it’s the case that families are struggling to find suitable housing. Build to Rent schemes may well provide the answer they need.
Looking at trends in the country, it’s clear that this isn’t a short-term issue. People now expect to rent for many years. Indications suggest that as the proportion of the population renting grows, the rights of tenants will improve, and as they do, the drive to become an owner-occupier will lessen. The future will see more families renting long term, demanding not just stable tenancies, but also infrastructure, schools and local amenities. Investors who previously may have been looking at student accommodation projects for their returns are now showing interest in Build to Rent schemes with a wider remit – including the construction and management of family homes.
The Scottish Government is keen to encourage the development of the Build to Rent sector and in particular high-quality schemes which deliver professionally-managed homes. Its aims include the provision of properties which are indistinguishable from those built for sale, but which meet the needs of tenants. In other words, it’s not just the bricks and mortar that matter, but also how the schemes are managed. As an example, at the new Harbour Gateway development in Edinburgh, tenants are being offered the option of moving in without an initial deposit. Instead of having to find possibly two months’ rental upfront, they can purchase an insurance policy which will give their landlord the same level of protection.
The best Build to Rent schemes combine great homes with great customer service. They embrace the use of technology. They generate capital growth for those who invest but not at the expense of the tenants. And if developers in Scotland can deliver more successful schemes, they’ll not only put a dent in the housing crisis but also help to build a new model where renting isn’t second best but is simple, common sense.