RETTIE & Co. has highlighted the ‘strong fundamentals’ underpinning the residential investment opportunity market in Scotland, but also ‘negative sentiment’ towards the Private Rental Sector (PRS) from UK and international investors.
The business said political risk, including the continuation of a rent freeze cap, has translated to negative investor sentiment towards Scotland.
The views are expressed in Rettie’s ‘Build to Rent Scotland, Scottish Market Review 2023’, with the firm’s director of strategy and research John Boyle saying current investor sentiment should be considered a ‘major concern’ given the scale of the housing supply crisis.
John Boyle said, “It’s impossible to hide what can only be described as a pessimistic picture of the Scottish PRS and BTR sectors, although we believe the market still has the potential to deliver for those bold enough to invest. So, we’re not ruling out a year of discontent moving into more of an Indian Summer.”
Gillian McLees, director of BTR at Rettie & Co, added, “While it was hoped that institutional investors would step in to fill the shortage of housing in the Private Rental Sector, a number of factors including political intervention in the sector continues to exacerbate the problem of supply. This means that we are getting thousands of applicants for our properties who we are having to turn away, many of whom are in desperate need and we would love to accommodate, but there is nothing close to an adequate supply of housing.”
The report also reveales that while the sector continues to grow in Scotland, the speed of development is ‘significantly’ below the trajectory elsewhere in the UK. The report indicates that an improved investment environment will help to drive the approximately 14,000 planned BTR and MMR units in Scotland, collectively valued at around £3 billion, which are still to reach the construction phase.
Rettie has almost £1 billion in assets under management, working in partnership with organisations including Forth Ports and Moda Living.
