A leading trade body is urging newly elected Scottish Councils to embrace investment in build to rent (BTR) and co-living to help address the current housing crisis, addressing nationwide shortages of rental stock and providing additional housing supply to help meet housing targets.
The call, following the council elections on 5 May, comes from the UK Apartment Association (UKAA), which recently launched in Scotland at an event in Glasgow.
Data from the Royal Institution of Chartered Surveyors (RICS) shows that in Scotland demand for rental housing had risen by over a third in the last three months, while supply had dropped by around 50 per cent, leading to an expectation that rents in Scotland will rise faster than in England and Wales.
Brendan Geraghty, CEO of the UKAA commented:
“BTR and co-living offer a tremendous opportunity for the thousands of people looking for a good place to rent, as well as councils wanting to revitalise neighbourhoods while solving the housing crisis in their area. Scottish councils are perfectly placed to look to models of living that are already popular across Europe and harness investment from organisations like pension providers to fund affordable, high-quality homes with a long-term value.
“We are witnessing massive demand for a new form of housing because so many people don’t see the traditional housing market as working for them. But the supply just isn’t there to meet the need. Managing rents can’t solve the fundamental issues in the market so it is time to focus on really delivering a supply of sustainable homes in sustainable locations.
“There is an opportunity for newly elected councillors to take the time to really understand and fully embrace BTR and co-living as having a critical part to play in helping to solve Scotland’s housing crisis, enhancing quality and choice in the private residential sector.”
Stuart Patrick, Chief Executive of Glasgow Chamber of Commerce commented:
“BTR and co-living are delivering high-quality housing, which is desperately needed, and will serve to address increasing demand. Innovative approaches to housing such as this are to be greatly welcomed and will also serve to retain and attract skilled young people to our cities.
“Glasgow City Council’s City Centre Living Strategy, for example, outlines a target to double the city centre’s population to 40,000 over the next 15 years and increasing density in the city centre is essential to its long- term success and sustainability. BTR is a key element in delivering this.”
Gillian McLees, UKAA Scotland Chair, commented:
“2022 is set to be a pivotal year in the BTR sector in Scotland with the launch of landmark schemes to the public and long awaited buildings becoming operational. The UKAA and the UKAA Scotland Steering Committee are committed to the success of this sector and providing the rented homes that Scotland desperately needs.”
BTR is a relatively new model for creating new homes in the UK, where all the properties are built for rent, not for sale and are located in close proximity to amenities, places of work and transport links.
Co-living is a type of communal living in which residents get a private bedroom, with the opportunity to share meals and discussions in common living areas.
Residents of BTR/co-living are offered long-term security of tenure, with the flexibility of renting and have access to wider on-site amenities, such as gyms and community space, extending beyond the traditional boundaries of an individual housing unit.
With a lack of high quality private rented sector housing available on the market, BTR and co-living offer a solution to this.
BTR and co-living are especially attractive to a younger demographic, for whom there is a huge demand for a new form of housing.
Adopting BTR and co-living will aim to ensure that Scotland’s cities remain competitive with other big cities in the UK that are attracting billions of pounds of investment. Currently lagging well behind these, BTR north of the border offers the opportunity for high quality residential development.
While the planning pipeline in Scotland has grown 69 per cent since Q1 2020, bringing the total headline figure to 12,245 homes, the sector however remains nascent, with just c.1,000 homes currently operational. This accounts for just 1.4 per cent of all completed BTR homes in the UK. There is however the potential for the sector to reach over 100,000 homes at full maturity, a third of private rented sector (PRS) households.
The pipeline in Edinburgh and Glasgow represents 6.7 per cent and 10 per cent of current private rented sector households, respectively. There is great capacity for growth given the pipelines in Manchester, Birmingham and Leeds represent 29.6 per cent, 15.5 per cent and 13.1 per cent of current PRS households
BTR schemes in Glasgow include proposals for 324 homes at Buchanan Wharf and 685 BTR and co-Living homes at Portcullis House, with 338 homes at Skyliner and 476 homes at Fountainbridge in Edinburgh.
While the focus is currently on Edinburgh and Glasgow to host BTR/co-living, both Aberdeen and Dundee are being highlighted as potential locations for future supply. Indeed, Scotland’s first institutionally funded BTR development was in Aberdeen.