Scotland stuck in build-to-rent malaise as rest of UK booms

Scotland is lagging far behind England when it comes to building properties specifically for the rental market despite strong market demand, a new study reveals.

Figures for the end of the first quarter of 2018 show that for every build-to-rent (BTR) home in Scotland, north-west England has nearly ten.

The research, compiled by property consultancy Savills on behalf of the British Property Federation, calculated that Scotland currently has 3,365 BTR homes complete, under construction or in planning. In comparison, the north-west of England has 29,600, the south east (excluding London) 7,101, the West Midlands 6,378 and Yorkshire and The Humber 5,131.

Across the UK, the data shows that this sector of the property market has grown by 30 per cent in the past year as growing numbers of people find themselves unable to get on the traditional housing ladder, or simply choose to rent rather than buy.

As the BTR sector continues to grow, it has also been able to diversify its offer – with almost a fifth of the schemes in the pipeline including houses, rather than just typical highrise apartments.

David Melhuish, director with the Scottish Property Federation, said: “Buildto-rent has historically been characterised as simply a step up from student accommodation for millennials, but this is now changing.

“The sector’s growth means it can cater for a wider range of people, including families. These purpose-built rental properties are high-quality, often with linked amenities, sustainably constructed and well-managed inter-generational homes.

“In Scotland, there has been a promising boost in the number of BTR homes, with 3,365 homes now at varying stages of the development process. The numbers are still not high in comparison to the rest of the UK, but there are now multiple sites in Glasgow which should act as a spur to other BTR projects across the country.”

Meanwhile, the latest Citylets report for the first quarter records a rise in the Scottish national average rent to £780 per month, up 1.6 per cent year-onyear, as concerns about supply in urban locations continues to bite.

Seasonal demand for larger four-bed properties also had an impact, lifting the national average into growth territory for the first time in three quarters. Rents in Scotland have risen 3.1 per cent on average over the last five years and 2.1 per cent over ten years.

In Edinburgh, annual rents have been increasing, as measured quarterly, for eight full years. Rents in the capital are currently at an all-time high of £1,062 on average.