Blog: How the private rented sector could revolutionise renting homes in Scotland’s cities
The housing market has gone through a sea change in the past few years with the Private Rented Sector emerging as a key trend, for both occupiers and investors.
PRS works in two keys ways - to help people living in the houses and help the economy by encouraging the provision of quality homes, in a housing sector that has grown due to worldwide economic forces, pushing home ownership out of the reach of more and more people.
The Scottish Cities Alliance and partners understand the importance of an appropriate housing to support economic activity and create vibrant cities. Through the Alliance our city authorities, Scottish Government and partners Homes for Scotland are actively engaging the residential property market to encourage supply and provision of quality homes for citizens attracted by our seven distinctive cities.
PRS or Build to Rent (BTR) housing (as it is sometimes referred to) is a housing tenure with homes owned and let by professional private landlords which provides flexibility for citizens and choice in terms of how people choose to live and work. Increasingly home ownership is not a priority for young adults or mature city dwellers consuming ‘on demand’ services with the preference to be free from maintenance and financial obligations as an attractive lifestyle option.
Private rented housing has the potential to play a very positive role. In Scotland there is an emerging supply of PRS developments but we are keen to support more investment and productive activity in this area. Scotland’s cities are currently looking at PRS opportunities and the Alliance will promote these to potential investors via our Pitch Book and in the course of our investment events.
The Scottish Government is currently developing a Rental Income Guarantee Scheme (RIGS) to help kickstart the Build to Rent sector in Scotland. This is designed to provide greater confidence during the early stages when lettings risk is likely to be highest. Should an investor not achieve their anticipated level of rental income a Scottish Government guarantee would compensate them for part of this. The Scottish Government is finalising detailed work on the proposed initiative and an announcement on this is expected shortly.
The Private Housing (Tenancies) (Scotland) Act 2016 creates the new private residential tenancy (to replace current assured and short assured tenancies) and it is expected to come into force in December 2017. The purpose of the new tenancy is to improve security of tenure for tenants balanced with appropriate safeguards for landlords, lenders and investors and is part the approach to make private rented sector more professionally managed well-functioning sector, providing good quality homes for Scottish residents.
Overall, there is much work to be done and a lot of work being done to improve the quantity and quality of Scotland’s Private Rented Sector. Watch this space.
For more information on the work of the Scottish Cities Alliance in relation to PRS, contact Kate Leer firstname.lastname@example.org