Scotland Build to Rent Market Jan11

Scotland Build to Rent Market

The rise of the build-to-rent sector is changing the way we live – but gaining support from local authorities is critical to its success. Now firmly established in London, Manchester, Birmingham and Leeds, the market is also taking off in Scotland – but how is this market different, and what are the challenges for investors and developers? Yardi brought together a panel of industry thought leaders to discuss the main issues. Iain Murray, managing director, LIV Consult Dan Cookson, digital innovation consultant, Homes for Scotland Christa Reekie, commercial director, Scottish Futures Trust Rick de Blaby, deputy executive chairman, Get Living London Peter Carus, associate, GVA Claer Barrett, Financial Times (chair) CB: How does the Scottish build-to-rent market differ from England’s?   IM: Looking at demographics, earnings and the overall rental market, Scotland is not that different from Leeds, Manchester or other big English cities outside London. Lots and lots of people rent. The difference is that Scotland, at the moment, is behind the curve. The Independence Referendum [in 2014] created a great deal of uncertainty, which held the market back. Talk of a second referendum had the same effect. If that were to start up again, investors would begin to get nervous. For now, investors seem to have got over Brexit and the ‘indyref’ – their money has to be put somewhere. PC: The key difference is that build-to-rent is taking its time to get going in Scotland. At a national level, there’s clearly been a big push. Now that’s beginning to come down to local government level and the planning authorities are supportive of new build-to-rent projects. RdB: The further you get from London and the South East, the more open for business local authorities are. The planners in Glasgow have been very receptive, and the new planning advice note that has recently come from the Scottish government is very useful too. IM: It does help that Scotland has a majority government too. CB: How are Scottish leases different – is this a problem for investors? RdB: The Scottish residential lease is distinctly different. When a tenant leases an apartment, effectively they have indefinite security of tenure. That might put some investors off; it certainty doesn’t put Get Living off as our model seeks to accommodate longer resident commitments anyway. IM: As a build-to-rent management company, our clients want people to stay for as long as possible. Turnover in tenancies costs money. CR: The Scottish system creates a lot of certainty for tenants that simply doesn’t exist in England. IM: Scottish leases are something that will put investors off if they don’t do proper research. Some build-to-rent investors will have an endgame of eventually selling the flats they develop. And they still can. There are extensive grounds for ending a lease and evicting the tenant; reasons include that you are selling the property, it is being refurbished, they have broken the tenancy agreement, they are being anti-social. As a build-to-rent management company, we are quite keen on this legislation as it gives me additional security. But from a conceptual point of view, investors outside Scotland may find it difficult – anything different from the norm, and some investors will think it’s easier to put my money in Manchester or Birmingham. CB: How have you changed your business model for the Scottish market? RdB: There are three, possibly four, cities in Scotland where build-to-rent could work. We have bought a 7.5-acre site to the east of the Merchant City in Glasgow, and we’re about to submit a planning application for 727 private rental with 99 student units. Our model is all about scale – we don’t do under 500 units. It is tempting to take what works in London and replicate it. But our focus groups in Glasgow have provided some valuable insights. For example, renters up here in Scotland don’t do as much apartment sharing as those in...

Build to Rent

LONDON – Technology has changed all our lives so fundamentally in recent years that it is sometimes difficult to look back to an era when things were done differently. Today’s normality was, just a short time ago, unthinkable. Banking is a good example. Today, we take it for granted that we can access our accounts at any time and transfer money and pay bills quickly and cheaply. The chequebook is still available for those who need it, but it won’t be long before they too are consigned to history. Then take taxis. While in London at least, using a cab was once the preserve of those with substantial salaries – or travelling at somebody else’s expense – now the rise of Uber and others means that getting a ride home is a real option for many people. Property has, of course, been slow to embrace the benefits that digital technology can bring – one estimate is that the industry is around 20 years behind financial services – but that is starting to change and at pace. Just a few years ago, if the property press mentioned technology at all, it was to reference the influence of the likes of Rightmove or Zoopla. Today the phenomenon has its own name: proptech. A lot of attention has been paid to how proptech is disrupting the industry, most notably through big data potentially making the role played by many agents redundant. That is obviously a cause for concern and the introduction of new ways of working will obviously have to be done with care and compassion. But proptech also has the potential to bring huge benefits to both property companies and their consumers – and without the need for anyone to lose their jobs. In no sector...

Build-to-Rent Mar12

Build-to-Rent

GREAT BRITAIN (March, 2017) – It is no longer about landlords; today’s property managers recognise that happy residents are at the heart of any successful scheme. Yardi invited a panel of experts in Leeds – a ‘northern powerhouse’ city heavily invested in cutting edge build-to-rent development – to discuss the rapidly-evolving sector Graham Bates – Founder and chief executive – LIV Group Jonathan Pitt – National director, corporate PRS and build-to-rent, Countrywide Joanne Pollard – Director – Five Nine Living, Fresh Student Living Andrew Wells – Partner and non-executive chairman – Allsop Letting & Management (Interviewer) Claer Barrett – Personal finance editor – Financial Times (chair) What is the biggest challenge for the build-to-rent sector? Joanne: There are three main challenges. Firstly, there’s not enough stock. Everyone wants to pile in from an investment perspective – and if you want to buy assets producing rents, that’s a challenge. Secondly, we’re all learning about this together. There are new practices and we need to find the best ones. And finally, costs. How much of a premium are people prepared to pay? Jonathan: I agree – the big challenge is where the private rented sector (PRS) sits in the market. What is the premium people will pay to live in a well-run building with amenities? And what about mid-market level? Graham: PRS is not the right label. What we do is build-to-rent. The private rented sector as a whole includes buy-to-let. We are a segment of PRS but what makes us different is that we are building for long-term rental. We are starting to see what I call ‘live learning’. As this sector started to take off, people talked about what might happen. Now we’ve got people living in buildings. We have data. We can conduct...