Building Scotland Fund to invest £30m in Scottish rental market
The Scottish government is to lend £30 million for properties to be built for private rent
The Scottish government is to lend money for the construction of 1,800 additional homes for long-term rent.
The £30m investment from the Scottish government’s Building Scotland Fund will be used for properties to be built for private rent. It will be delivered through Sigma Capital Group. The company has created a £43m Scottish Private Rental Sector Fund, of which £30m comes from the Building Scotland Fund. The fund is a precursor to the Scottish National Investment Bank and reflects the principles behind it.
The Scottish government said that the ‘Build to Rent’ model can reduce the stress and uncertainty of repeated moves for tenants as investors typically plan to keep the properties for a minimum of 30 years. It added that the properties are also professionally managed, meaning tenants can expect a high-quality property and an overall better rental experience.
Communities secretary Aileen Campbell said renting accommodation is becoming a long-term option for many people, at many stages of life, for example when starting a family or when retiring. The government wants everyone who rents to be able to live in a house that suits their needs and in an area where they want to live, including near family, friends or schools.
Campbell said people should have the security to make that house their home – whether they are looking for a house for three years or thirty years.
Private residential tenancies are open-ended, with no fixed-term period and no end date, and can only be ended if the tenant chooses to leave and gives notice, or if one or more of the 18 grounds for eviction apply.
She added that the private residential tenancy already offers greater security for tenants, balanced with appropriate safeguards for landlords and investors. These additional new properties to the sector can give people long-term security and the confidence they are renting from an experienced, professional management company. The additional long-term stability these properties provide will make a huge difference for many households, especially those wanting to create a family home and settle into a community.
Graham Barnet, chief executive of Sigma, said that they are delighted to have the support of the Scottish Government’s Building Scotland Fund. Their approach to housing delivery has been working extremely well in England, and is helping to deliver thousands of new houses for the private rental market.
He added that there is significant demand for their high-quality, professionally managed homes in Scotland and look forward to using this new fund to assist in addressing Scotland’s housing needs. They are also continuing to explore other opportunities to extend this business model.