Rental market in Scotland to benefit from £30 million investment
People renting will have more choice in where they live and greater security over their home through a £30 million investment from the Building Scotland Fund, it has been announced.
The loan funding will allow an additional 1,800 properties to be built for private rent at a time when the Build to Rent model is regarded as having a role to play in reducing the stress and uncertainty of repeated moves for tenants as investors typically plan to keep the properties for a minimum of 30 years.
The properties are also professionally managed, meaning tenants can expect a high-quality property and an overall better rental experience, according to Communities Secretary Aileen Campbell.
‘Renting accommodation is becoming a long term option for many people, at many stages of life, for example when starting a family or when retiring. We want everyone who rents to be able to live in a house that suits their needs and in an area where they want to live, including near family, friends or schools,’ she said.
‘We want people to have the security to make that house their home whether they are looking for a house for three years or 30 years. The Private Residential Tenancy already offers greater security for tenants, balanced with appropriate safeguards for landlords and investors,’ she pointed out.
‘These additional new properties to the sector can give people long term security and the confidence they are renting from an experienced, professional management company. The additional long term stability these properties provide will make a huge difference for many households, especially those wanting to create a family home and settle into a community,’ she added.
The investment from the Scottish Government’s Building Scotland Fund will be delivered through Sigma Capital Group. The company has created a £43 million Scottish Private Rental Sector Fund, of which £30 million comes from the Building Scotland Fund. The Fund is a precursor to the Scottish National Investment Bank and reflects the principles behind it.
According to Graham Barnet, chief executive of Sigma, the firm’s approach to housing delivery has been working extremely well in England, and is helping to deliver thousands of new houses for the private rental market.
‘We see significant demand for our high-quality, professionally managed homes in Scotland and look forward to using this new fund to assist in addressing Scotland’s housing needs. We are also continuing to explore other opportunities to extend our business model,’ he added.
Private residential tenancies are open-ended, with no fixed term period and no end date, and can only be ended if the tenant chooses to leave and gives notice, or if one or more of the 18 grounds for eviction apply.
Meanwhile, an extra £80 million has been earmarked over the next two years to help councils deliver affordable homes across Scotland. The investment will mean local authorities will share a total of £1.3 billion between now and 2021 to help achieve the Scottish Government’s ambitious aim to deliver 50,000 affordable homes, with 35,000 available for social rent, by that date.
‘We believe that everyone should be able to live in a warm affordable home. Our investment and delivery of affordable housing is the biggest since devolution and I am determined to see it benefit communities across Scotland,’ said Housing Minister Kevin Stewart.
‘This investment backs up our ambitions with financial certainty. We will continue to work in partnership with councils and housing associations to deliver quality homes to meet local needs,’ he added.
