Housing bill heads for second reading next week
The number of build-to-rent homes under construction across Scotland has dropped 26% in the past 12 months, according to new analysis from the Scottish Property Federation (SPF) and Savills.
The number of build-to-rent (BTR) units under construction in the first quarter of the year dropped 26% compared with the same period last year.
The SPF, which represents the interests of real estate owners and investors in Scotland, cites the figures as evidence of the “chilling effect” of rent control measures currently being considered in the Scottish parliament.
The Housing (Scotland) Bill, which was introduced to parliament on 26 March, would among other things create a power for Scottish ministers to introduce rental control areas.
Property owners have criticised the bill, but it has received support among organisations such as Living Rent, which represents tenants in Scotland.
The BTR trend in Scotland is similar but more severe than that seen in the rest of the UK, where rent controls are not under consideration.
Research published by the British Property Federation (BPF), also in conjunction with Savills, recently revealed that BTR starts had lagged behind completions for the fifth successive month.
The number of BTR homes under construction in the first quarter of this year dropped 14% compared with last year, with London hit the hardest.
The BPF said the slowdown was due to “significant delays” at the Building Safety Regulator “blocking schemes”, while concerns over viability, costs and the economy are also leading to caution in the market.
Scotland recorded zero growth in the number of new BTR schemes being submitted for planning during the period, compared with a 6% rise in England.
>> Read more: A distinct culture but familiar dilemmas: Spotlight on Scotland’s housing sector
The housing bill heads back to parliament next Tuesday for stage 2 of the legislative process, which will see a total of 447 amendments debated.
Amendments proposed by the government itself include an inflation and capped rent control mechanism of CPI+1%, up to a maximum of 6%, as well as a series of exemptions to the regime.
The government launched a consultation on the extent of these exemptions today, with tenants, private landlords and housing associations invited to share their views.
Some property owners have argued that mid-market rent and build-to-rent should be excluded from the policy.
The government also proposes to change the target date to 31 May 2027 for local authorities to make private rented sector market assessments and recommendations on whether or not to introduce a rent control area.
David Melhuish, director of the Scottish Property Federation, said: “This disappointing evidence of zero growth in new BtR applications is sadly not surprising and echoes what we have been saying for years as a sector to the Scottish Government.
“These figures are the natural consequence of a lack of investor confidence over the last three years in the future of Scotland’s Build to Rent sector as a result of persistent policy uncertainty, especially around rent controls.”
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