As 2023 draws to a close, it is time to look ahead to the future of the Scottish rental market and how it could shape up over the next 12 months and beyond.
High demand
The demand for rental properties in Scotland increased by 10% between June 2022 and June 2023, which is good news for landlords as high demand makes tenant acquisition much easier.** One of the main reasons for the recent surge in demand is that it is easier for people to rent a home than it is to get on the property ladder.
This has led to a 28% increase in the number of people aged 16-34 renting a property between 1999 and 2021.*** An increase in the number of students and the improved flexibility that comes with renting also help explain why demand is so high.
Build-to-rent
Build-to-rent (BTR) is a sector in the housing market that involves the construction of purpose-built rental properties. BTR properties are generally more affordable for tenants and include more amenities, such as Wi-Fi. They also tend to have better facilities, such as communal areas, social events, and locations where parcels and letters can be held for tenants. With 17,000 BTR properties scheduled to be built in the near future in Scotland, the supply of these private rental homes is set to increase, which is fantastic news for prospective tenants.*
What’s next?
The Scottish Property Foundation (SPF) has proposed three goals to the government that they believe will address some of the issues surrounding Scotland's private rental sector (PRS).
Firstly, they have emphasised the importance of increasing the number and variety of rental homes available, in order to make renting a property a more affordable and stress-free proposition. They believe that BTR properties are the best way to accomplish this.
The SPF has also set the goal of promoting Scotland as a safe and appealing location for BTR property investment. They have emphasised the importance of the government not enacting policies that increase the risk of investing in BTR properties.
Finally, the SPF has urged the government to ensure that the new PRS meets the needs and preferences of long-term tenants. This includes providing improved lifestyles, investing in green spaces, and supporting the 20-minute neighbourhood initiative.
Overall, the Scottish rental market appears to be promising for both tenants and landlords as we approach 2024, with the SPF encouraging the government to push initiatives that will improve Scotland's PRS. Tenants and landlords are set to benefit from the ever-changing nature of the rental market, with many BTR properties in the pipeline and high demand for such homes.
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Scottish Property Foundation*
Zoopla**
Scottish Household Survey*** *