Build-to-Rent is one of the fastest growing sectors in housing. A recent survey found 40% of 18 to 24-year-olds questioned in Glasgow said they would like to rent long-term.
The biggest appeal was that accommodation and services are typically packaged together in Build-to-Rent properties. They liked the idea of an all-inclusive offering where household expenses such as internet, utilities, cleaning and council tax are combined into one monthly fee.
The findings come from the newly published report Urban Being – The Future of City Living and the European ‘Beds Sector ,’ compiled by CMS in conjunction with FTI Consulting. CMS surveyed 6,500 people in key European cities, including Glasgow, on key aspects of their living environment such as housing affordability, supply and shifting technological, economic and lifestyle factors across generations and societal groups.
It found that for 76% of 18 to 24-year-olds surveyed in Glasgow, owning a home is not a priority. On average, Glaswegians would be prepared to pay around £1200 per month for a high quality, all-inclusive rent – perhaps surprising considering that the average annual household income in Glasgow is £37,000.
Meanwhile, 84% of those surveyed in Glasgow think more should be done to protect tenant rights, including rent controls. While this is highly a controversial issue, with younger generations increasingly unable to buy their own homes, it is critical that they are not going to be priced out of the rental market as well. To address this, a number of established Build-to-Rent operators have already introduced CPI rent caps and scrapped tenant deposits, a compromise which could work for all.
With our survey showing technology is particularly important for Glaswegians, build-to-rent properties can also provide a more substantial offering and deliver higher community and professional standards for tenants, issues which were also highlighted in our report as key areas of importance.
Our survey also uncovered a potential demand for a Build-to-Rent model for retirement living in Scotland. With 45% of real estate respondents interviewed indicating retirement living was the sector with the most potential for growth over the next five years, there is an opportunity for a developer to create an aspirational product that would appeal to an older demographic. While three-quarters of Scottish over-60s own their homes, rental solutions could offer higher quality accommodation that is better tailored to the needs of an ageing population, particularly those in good health, active and seeking a sense of community.
Although the Build-to-Rent sector has been slower to take off in Scotland than in some of the major cities in England, consumer perceptions are beginning to change as the Glasgow findings of our survey show that a high proportion of people see benefits in long-term renting. This suggests we could see significant investment in all forms of rented accommodation in Scotland, including in the build to rent market. It will however be important for developers and investors to ensure the proposition and the pricing is right.
These emerging trends have the potential to reshape the local housing markets from an economic and political standpoint and better reflect how people of all ages want to live, work and play in our cities in the future.
