Purpose-built and professionally-managed Build To Rent - until now seen as a primarily London phenomenon - appears on the march in Scotland too.
“Build To Rent is now emerging in Scotland as a key new residential use class, with over 2,500 units now in the pipeline in Edinburgh and Glasgow” according to Stuart Montgomery, director of lettings at the agency Rettie & Co.
“Scottish cities compare favourably to other parts of the UK in terms of yields, entry prices and potential for growth. At nearly 7.0 per cent, average gross rental yields in Glasgow are as high as they are anywhere else in the UK” he adds.
“Affordable Build To Rent schemes are now well established in Scotland, with high levels of demand in appropriate locations, including Western Harbour in Edinburgh, where there were over 3,400 applicants for a 96-unit Mid-Rent development” Montgomery concludes.
His comments come in the latest quarterly lettings report on the Scottish market by CityLets.
In the second quarter of this year average rents in major Scottish cities were rising at 1.5 per cent annually to £789 on average.
Growth was underpinned by continued strong uplift in the key conurbations of Edinburgh (5.2 per cent) and Glasgow (5.0 per cent), where markets have reached respective all time highs, and with reduced drag from Aberdeen which continues to even off this quarter.
“Edinburgh has recorded positive annual growth every quarter for a full eight years and averages 6.0 per cent over the last five years. Glasgow is up 5.0 per cent on average over the same period” according to Citylets managing director Thomas Ashdown.
The Aberdeen market - uniquely hit in recent years because of stubbornly low oil prices affecting the main employment sector - saw the rate of decline ease from minus 11.2 per cent annually to minus 5.2 per cent. Positive growth was recorded for four bed properties, the first uplift for any property type in the city for nine quarters.