The UK Apartment Association (UKAA), the body which represents the Build to Rent (BTR) sector, today acknowledged the publication of analysis of landlord and tenant engagement on rented sector reform on 8 March.
The engagement asked whether landlords and tenants agreed that rent controls should be applied across Scotland or locally where required. However, the fundamental question of whether such controls should or should not be applied was not asked.
In principle, the UKAA opposes rent caps in any form as it lowers confidence and inhibits the BTR sector’s ability to deliver customer, community, and investor value. Investors invest for the long term, for stable returns and if rent control is in play, it can disrupt and harm the certainty of those returns.
This has been witnessed with the current situation in Scotland where a rent cap was announced for private landlords by the Scottish government from April 2023.
The BTR investor community recognises the opportunity around the supply and demand of housing and are well positioned to meet the grossly unsatisfied demand for quality homes across the UK. It is not however solely about the investment opportunity but also the creation of social value. The two facets go hand in hand with BTR and highlight one of the many differentiators between the BTR sector and the wider PRS.
The limited BTR stock in Scotland has been well received by the market to date but following the rent cap announcement, investor confidence has been affected. Some investors are already pausing and / or withdrawing from the market entirely which can only harm the future delivery of these much-needed, good quality homes.
The Scottish Government has made social housing providers exempt from this cap. As both social landlords and BTR providers hold the same aspirations to deliver good quality housing, in good quality communities, the UKAA argues that the BTR sector should be treated in a similar manner.
The UKAA is leading the development of a Code of Practice for Build to Rent operators, setting out standards of practice in terms of quality of accommodation, customer service, response to resident issues, communication, and resident wellbeing as well as clear and fair terms of tenancy.
The UKAA will continue to engage with the Scottish Government and will work with all stakeholders to ensure a full understanding of the impact of rent control, and how to ensure an environment whereby BTR can add significant volumes of good quality, professionally managed new homes that treat residents fairly.
The full Rented sector reform: landlord and tenant engagement questionnaire – analysis report can be found here.