The Scottish Government will appoint a private rented sector champion to help solve the country’s housing crisis, on the advice of a report co-authored by LSE London and the Cambridge Centre for Housing & Planning Research.
The new champion will lead an expert group that will identify the barriers to large-scale construction of purpose-built rented homes in Scotland and work to get financial institutions more involved in rental housing.
It is one of several recommendations put forward by researchers to answer the expected demand for 465,000 new homes in Scotland over the next two decades.
Kath Scanlon, a Research Fellow at LSE London, said Scotland needed to take urgent action to provide at least 7500 new rental dwellings a year to house the growing population.
“Scotland’s housing output has slumped by over 40 per cent since 2007, just when the number of households has started to increase quite rapidly,” Ms Scanlon said.
“Mortgage lenders were reluctant to lend money in the aftermath of the GFC and traditional first home buyers also faced more stringent mortgage tests. The net effect of this has been to put more pressure on the rental market,” she said.
Ms Scanlon said new sources of private funding and financial models were needed in Scotland to encourage developers to invest in the rental sector.
“The demand is there but investors need assurances of good returns and lower risks. Equally, developers must see the potential for profit if they are to build new homes.”
Obstacles include the lack of development finance and rental sector experience, coupled with low yields and the difficulties that developers of rental housing have in competing for land against those developing for owner-occupation.
Between 2001 and 2011, the private rental sector grew from 7 per cent to 12 per cent of Scotland’s total housing stock and that figure is expected to increase, particularly in Edinburgh and to a lesser extent in Glasgow, Aberdeen and Inverness.
Among the other recommendations proposed by Ms Scanlon and her colleagues include the implementation of a Build-to-Rent scheme in Scotland.
For media enquiries contact Kath Scanlon, LSE London, on 020 7955 6602 or email@example.com or Candy Gibson, LSE Press Office, on 020 7955 7440 or firstname.lastname@example.org
Notes for editors
Building the Rented Sector (BRS) in Scotland project was undertaken by the London School of Economics and Political Science and Cambridge Centre for Housing & Research, University of Cambridge. For a copy of the completed report, contact Kath Scanlon at email@example.com
The authors of the report are Kath Scanlon and Professor Christine Whitehead (LSE), Peter Williams (Cambridge Centre for Housing & Research) and Kenneth Gibb (University of Glasgow)
Tuesday 17 June 2014