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Build to Rent and the Scottish market: insights from industry leaders

A panel of industry leaders discussed Scotland’s housing and Build to Rent market in a webinar hosted by Built Environment Networking.

Chaired by Phil Laycock, Director of Built Environment Networking and a panel of Build to Rent and housing experts discussed a range of aspects about the Build to Rent market in Scotland, how the planning process differs, the need to educate the planning industry and residents about the Build to Rent model, and the potential of Glasgow as a critical housing market.

The past and the future

The Scottish Futures Trust have been active in the Build to Rent market through acting as the administrative agent for the rental guarantee scheme. Associate Director Fiona Clandillon discussed how the Build to Rent sector has matured in Scotland with entries into the market in recent times, explaining that the rental guarantee scheme has helped the maturity process.

Fiona highlighted their future plans, which focused on evolving their Covid-19 response around helping the housing and construction sector – working with the Scottish Government and local authorities to find a way forward during the current coronavirus pandemic.

The planning process

There were lots of discussions around the planning process in Scotland and differences appeared in the processes between Glasgow and Edinburgh. Duncan Sutherland, Regeneration Director at Sigma Capital Group plc discussed the issues around getting the Build to Rent market going in Scotland. There is a small volume of sites that are made available through the planning system, so there’s higher competition, leading to higher land value. 

Jamie Snary, Asset Management Director at Apache Capital Partners also discussed differences in the planning process in Glasgow and Edinburgh – and how both local authority approaches differed. The process was much smoother in Glasgow, where planning was submitted for Holland Park, a Build to Rent scheme on the previous Glasgow Police headquarters. 

However in Edinburgh, the planning process for Moda’s Springside development – a joint venture fund between Apache Capital Partners and Harrison Street – took longer than expected. 

Educating the whole planning industry and wider public

The panel of experts agreed that more needs to be done to educate the planning industry and public about the Build to Rent model. Fiona explained how she has an informal role in bridging the gap between the public sector and the Build to Rent market, bringing them closer together so people become familiar with the Build to Rent concept.

Duncan expressed the difficulties around building relationships with councils in Scotland and explained that people – especially valuers – don’t understand what Build to Rent is, so more needs to be done to help them look at Build to Rent in a different way.

Jamie continued with similar thoughts, expressing that it’s a case of educating the whole planning industry and the wider public. While Build to Rent and amenities is well known in the States, it isn’t particularly well known in Scotland or in the UK as a whole.

The Scottish housing market and Build to Rent

Glasgow is the centre of Scotland’s only metropolitan city – and it’s critical to the housing market. In the last calendar year, there was a 4% increase in rent which has been the average over the past ten years. Patrick Flynn, Head of Housing Services at Glasgow City Council said this shows stability in the market. 

Patrick explained their future target of having 4,000 Build to Rent homes in the city, and there are already some high-profile schemes from Apache Capital Partners, Moda and Legal & General. There are 60,000 private rented homes – mostly flats – and 38,000 landlords, but with tax changes and the ‘new norm’ we face due to Covid-19, he expressed his views that the structure of the private rental market will change, and there will be opportunities across all tenures, as Glasgow has land.

Patrick explained that Glasgow is one of the world’s pre-eminent post-industrial cities, where there are a large number of opportunities immediately adjacent to it. The councils City Development Plan looks for buildings between 15 to 17 storeys high, and they’re keen to talk to developers as there’s a need for high quality homes in and around the city centre – which is relatively small. And Patrick spoke about the importance of attracting foreign investors, as Glasgow city centre offers the largest job offering in Scotland.

Other points identified

  • Delays in planning could be down to individual planning, behaviours and cultures. 
  • Legislative work isn’t what’s necessarily needed to improve the planning process.
  • There’s a need to build relationships in Scotland and have better partnerships with Scottish local authorities.
  • There’s a need for more collaborative work and market facing work.
  • There’s a bigger piece of work that is required around the planning reform.

Final thoughts

It was clear that there are many welcomed opportunities for more Build to Rent homes in Scotland, but the general theme that continued to pop up was the planning process, the differences in planning approaches and the need to build relationships. The Build to Rent market is resilient, and a collaborative approach will help see the sector spread the concept of Build to Rent community living.

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