Build to Rent is hailed as the potential saviour of the UK’s housing crises and a crucial part in improving standards in the rental sector.
What is build to rent? Build to Rent is the development of residential property specifically designed for holding and renting rather than for immediate sale. Typically, owners of Build to Rent schemes are institutional investors (pension funds or property companies) and these purpose-built schemes are well managed with a high level of customer service.
Build to Rent developments have been appearing throughout the UK over the past 3 years or so. UK-based institutions seem to have finally got their head round residential property as an investment class, taking confidence from the success of the student accommodation market and of the Build to Rent sector in the US and Europe. London, Liverpool, Manchester and Birmingham are leading the way in the UK.
Why do we need Build to Rent? A report from the House of Lords Economic Affairs Committee suggested that the UK government needs to create 300,000 new homes each year to tackle the housing crisis. In 2007 the Scottish Government set a target of 35,000 new homes a year for Scotland, however since then less than 20,000 homes have been completed a year. Focusing on Edinburgh, the city is booming with population expected to soar to 600,000 within the next 20 years as the City continues to attract professionals, families and students. This growth will put a huge strain on the city’s existing housing. Over a quarter of all households in Edinburgh are within the private rented sector (PRS) accommodating two thirds of younger households (18-34). This figure is expected to rise substantially over the next 20 years.
With house prices rising and the hurdle of saving a deposit due to increasing rents, buying a home is not an option for many younger people. We’re seeing a cultural shift away from home ownership. Many younger people don’t expect to buy a property and instead choose to rent. Renting in a modern, well-managed, well-located, Build to Rent development may provide benefits over buying; better location, better quality, cheaper commute, no repairs, no furnishing, thriving community.
Is Build to Rent happening in Scotland? Scotland is lagging the rest of the UK in terms of Build to Rent but we’re finally starting to see Build to Rent units coming through. According to Rettie, approximately 700 Build to Rent homes have been completed and inhabited in Scotland with a further 5,500 somewhere in the planning or build pipeline. This 6,000 or so properties represents only 1.6% of the 360,00 households in the PRS in Scotland whereas in London Build to Rent makes up almost 8% of the PRS demonstrating how things are that bit further forward in the UK’s capital.
There are currently 1,200 properties in the Build to Rent pipeline in Edinburgh with developments completed at Lochrin Quay, McDonald Road and due to be built at Fountainbridge and India Quay (although we’ll have to wait to see if this one ever gets out the ground). Forth Ports also have a large number of ‘Affordable Build to Rent’ units built or in the pipeline around Harbour Gateway and Western Harbour demonstrating that Build to Rent caters for all budgets and is not just for premium properties.
How Umega can help – We’re committed to improving standards throughout the Private Rented Sector and our award-winning approach to service and our experience and reputation within the sector are directly transferrable to the Build to Rent market. We have the skills and experience to help research, appraise, stabilise and manage build to rent developments.
- Site appraisal –knowledge of the Edinburgh rental market including data and analysis on pricing, rental growth, tenancy forecasting and budgeting
- Specification – we understand tenants’ needs, their amenity wish-lists and the appropriate design to maximise rental income and to appeal to tenants’ lifestyle needs
- Marketing – we know how to create an exciting, dynamic, tenant-focused brand, standing out in Edinburgh. Umega is a brand that Edinburgh tenants trust and we’ve streamlined the marketing process via; out of hours viewing booking, virtual tours, tenant vetting and online lease signing
- Management – we take care of tenants and can build positive relationships and solid communities to maximising tenant stay. We monitor tenant satisfaction closely, and our property managers and all other staff are trained to our high standards.