Spotlight: Is build to rent model good for Glasgow?

Around 2000 flats are due to come on to the market with many more planned and investors are actively looking at new sites.

In day of our Spotlight series we ask will Build to Rent bring benefits to Glasgow?

READ MORE:Glasgow build to rent. Where has the money come from and where will the profits go?

The new model will present a challenge to the existing private landlord model and property experts say it will drive up standards and offer more choice.

The Scottish Government and Glasgow City Council believe Build to Rent contributes to housing supply and the economy.

Others, including some politicians are concerned the benefits will only be seen by rich investors as cash flows out of the city.

Glasgow already has thousands of private rented flats. Many are owned by individual landlords with one or two flats and others who have large portfolios.

Rents in the city have rocketed to an all-time high with the latest figures showing average rent up 15 percent in a year to £974 a month.

READ MORE:Spotlight: Glasgow's new Build to Rent flats, where and what are they

Built to rent is more expensive, expected to be between £1150 and £1500 per month for a one bed flat but with more amenities and services included in the rent.

A property expert in Glasgow believes the Build to Rent model will bring benefits in quality and choice to the Glasgow market.

Ed Crockett, Director in the Operational Capital Markets with Savils, said renters will be getting quality.

He said: “Build to Rent is a specific part of the wider private rented sector. It delivers high quality homes for renters.

“It will increase the quality and breadth of choice for people who want to rent. Looking at Glasgow, a lot of the schemes are higher end, city centre living.”

He said it can attract businesses to the city, adding: “Corporates can take 20 flats in a development and rent to their staff.

Mr Crockett, said: “There is a range of affordability. The first ones tend to be at the upper level, that creates the ground for others to come through. The city centre is expensive. These buildings are not going to be empty. They will provide value for money they often include a gym, wi-fi deals and utilities. Add it together you can see the value.

“Every region across the UK should be embracing this. It can drive up standards in the private rented sector. ”

Some politicians are sceptical of the benefits and argue the investors get the best deal.

Christy Mearns a Glasgow city centre councillor and Greens housing spokesperson, said it could force rents even further and is not community minded.

She said: “The proliferation of Build to Rent housing is concerning. This must not be at the expense of providing more long-term, affordable housing.

“One study has suggested average rents are at least 10% higher than a comparable property elsewhere in the private-rented sector, and there is a risk that Build to Rent monopolies will drive prices up even more, and price more people out of ever owning their own home.

“Many will also be surprised to learn that the money flooding into this sector is coming from global investors and hedge funds. Greens believe housing is a human right, but this model makes it blatantly obvious that, for some, it’s just a means of making rich people even richer.

“The SNP administration supports the idea of community wealth building, which means that we harness more of our own economic power locally, but it’s not clear how that can be squared with its support for the Build to Rent housing model which will see people’s rent payments funnelled out of the city to deliver returns for global investment giants.”

Paul Sweeney Glasgow Labour MSP thinks the council should be entrepreneurial and be getting the benefit.

He said: “Why is the city not taking a much more proactive development approach through a city development corporation. We are selling assets of for capital receipts.

“All of the money is flowing out of the city. It is a drain of capital out of Glasgow.

“We would get the rental income. The state could be more entrepreneurial to pursue regeneration and bolster finances.

“We are missing a trick not thinking pro-actively enough and bringing in long term income. It could help reduce exposure to central government cuts.”

On the private investors, he added: “These people are not altruistic or charitable. It is to make money. The city should be in on the action. Cash is flowing into the portfolios of private investors.”

The developers have stated their commitment to investing in the city.

Moda Living is building 433 flats in its Holland Park development on the site of the old Strathclyde Police HQ in Pitt Street.
It is one of the four high-profile city centre and waterfront build to rent projects underway in the city, and due to be ready for the first tenants next year.
Moda says it is already contributing to the city centre improvement strategy.
Oscar Brooks, Moda Living director, said: “Moda Living is a long-term operator of its build-to-rent neighbourhoods, and it is therefore committed to investing in and supporting Glasgow, its communities, and its economy. 
“We will not build, sell and move on and neither will we landbank sites with no action. We want to provide good quality and well managed new homes for the people of Glasgow. Moda partnered with Glasgow City Council on its £136 million Avenues project, contributing significant investment to improving public realm in the city as well as consulting pro bono on the design of the new streets.” As well as new homes, the firm says it is helping bring jobs and skills to the city.
Mr Brooks said: “Holland Park has also generated strong employment and education opportunities for the city.”
“Of around 100 construction workers on site, including several apprentice workers, more than 75% have been recruited locally. 
“When the neighbourhood opens its doors in 2023, Moda will continue to hire local people whenever possible and will be offering apprenticeships in hospitality. Glasgow is a fantastic city with brilliant people and businesses and Moda is thrilled to be a part of that community as a long-term partner. 
“As a family company, we want to grow and deliver and regenerate more quality spaces that people want to see in the city. 
“The difference with Moda is that we do every stage, we design, build and then operate the neighbourhoods for the foreseeable. 
“We’re not going anywhere.”

Platform are building 498 one,t ow and three bed flats at Cenrtral Quay near the Kingston BridgeA spokesperson for Platform said :"The development forms part of a broader master plan of regeneration for the Clydeside Central Quay area.

"The site has created hundreds of jobs during the build and will continue to support the local community and Glasgow based businesses once completed by providing much-needed accommodation."

Glasgow City Council said Build to Rent can benefit the city.

A spokesman said: “It brings benefits in terms of employment through construction and associated jobs, brings additional people to live in Glasgow and spend their money locally all which help the economy, improves derelict sites, and reduces housing demand by giving people more choice in their housing options. It can also help improve anti-social behaviour by having parts of the city (re)populated.

A spokesman for the Scottish Government said: “Build to Rent is recognised as a mainstream housing delivery mechanism, that makes an important contribution to the broader housing market, and to the wider economy. We are pleased the sector is now growing strongly without requiring direct financial support from the Scottish Government.”