Build to rent housing can address ‘chronic shortage’ in Glasgow, developer says

A lack of homes, including for students who have been told not to enrol on university courses, and high rents mean many city residents are faced with a housing crisis.

At Lancefield Quay, property development and investment firm Osborne+Co and MRP, the property arm of construction company McAleer and Rushe, are working with operator Moda on a project which would see 400 Build-to-Rent [BTR] homes constructed.

Critics of BTR question its affordability – with properties in Edinburgh charging up to £2700 a month in rent – while a tenant-led commission, set up by the council, found affordable social housing should be prioritised.

But three men working closely on the Lancefield Quay scheme think the model could answer some of the problems in the city.

Will Hean, development director at Osborne+Co, pointed to the demand for the ‘Solesta Riverside’ BTR development at Buchanan Wharf, delivered by Drum Property Group for Legal and General.

“Prior to completion they had 700 notes of interest from people wanting to lease space,” he said, adding after 10 days on the market 60% of the flats had been let. “I think it proves there really is demand and there’s a chronic shortage of good rental properties for people to live in.”

Mr Hean is expecting an application for permission in principle at Lancefield Quay to go before the city’s planning committee in the coming months. He said a consultation process earlier this year was “very positive”.

A mix of studios, one, two and three-bedroom rental homes would be created. Moda, which the firm’s planning director, James Blakey, described as an “operator investor” rather than a developer, would manage the properties.

He said they have been working “very much in partnership with city council officers, particularly the city architect” on the plans. “When you consider the location of the brownfield site, it’s highly connected and it is earmarked for development,” he added.

“What we are proposing now is an ideal solution for a site which has possibly sat there for a little bit too long.”

There have been around 20 objections to the application from nearby residents. Some welcome development of the site but are worried about the size of the scheme, with concerns over the impact on local infrastructure, such as schools and GPs, as well as high rise blocks preventing sunlight reaching their homes.

Concerns have also been raised about the lack of car parking as residents believe new tenants will want to bring cars, increasing traffic and parking problems. It has also been said that there are limited public transport options.

Mark Adams, development manager at MRP, which was behind the Maldron Hotel on Renfield Street and is constructing a 303-bed Clayton Hotel and 162-bed Adagio aparthotel at A-listed Custom House, said the scheme has been “thought about meticulously”.

He described Lancefield Quay as the “most thought out residential development scheme I think I’ve ever been involved in”. “Prior to us making the application, we were involved in very collaborative, detailed pre-application discussions with the planning authorities which lasted 18 months.”

The development wouldn’t be “a closed exclusive gated block”, Mr Blakey added. “It’s open, it’s got great connections, it’s got public squares in the heart of it,” he said. “Think about it as part of the fabric of the city.”

And Mr Hean said it would create a “touchdown point” between the Hydro and the city centre, with bars, restaurants and ground floor activity. Mr Adams added it would “regenerate along that river walkway”. He said Moda was bringing in car clubs and would encourage active travel, such as cycling.

“Cycling is key for us,” Mr Blakey said. “We’re not keen overall on car parking, we don’t think it’s necessary. Delivering more car parking spaces tends to generate more traffic and traffic is noise and pollution. That’s not the direction you want to go in.”

Lancefield Quay isn’t Moda’s only development in Glasgow. Holland Park, a 433-home BTR scheme at the former Strathclyde police headquarters on Pitt Street, is under construction, with residents set to move in next year. It is funded by Apache Capital, a real estate investment company, and Harrison Street, an investment management firm.

Mr Blakey sells the developments as “all about establishing inclusive communities” which are “highly managed, highly amenitised”. He said BTR developments are “viable, deliverable schemes”.

“The city is in chronic need, there is a chronic shortage of new homes. BTR gives regular flexibility and choice, people are looking to BTR to fill a void in the delivery of new homes.”

Since 2007, Glasgow’s private rented sector has increased from 9.5% of the city’s housing stock to around 20%. In late 2020, the council, following a motion from the Green group, declared a ‘rents crisis’. It noted rents continue to rise to “unacceptable levels”.

A tenant-led commission was set up which recently released 16 recommendations to inform the city’s new housing strategy, including reforming planning policy to prioritise affordable social housing.

One objector to the Lancefield Quay plans said a rental only development was “hugely negative” for Glasgow with “the lack of housing stock”. “To have this size of development with no purchasable unit sets a terrible precedent and will do nothing to slow the house price bubble in the city and may in fact exacerbate it and entrench further ‘generation rent’,” they claimed.

Mr Blakey argued BTR is “part of the housing mix”. “It can’t just be one tenure,” he said. “What you are tending to find now is people are looking to BTR particularly in terms of the security of tenure, we offer three year leases as a standard.”

He said Moda tenants don’t require a deposit or a service charge and are offered “very accessible, very affordable” places to live. The planning director claimed people “gravitate towards BTR in these times because it does offer that choice of flexibility”.

In Edinburgh, three-bed Moda apartments are currently available from £2,700 per month while, in Birmingham, a two-bed property can be secured for £2,000 per month. There are two-beds for £1,850 in Leeds and in Liverpool studio flats are going at £1,000 per month, with a one-bed property from £1,300.

Within a Moda rent, residents get access to the gym, WiFi, the option to have their home furnished or unfurnished, bike storage and a 24/7 concierge. The firm manages all of its developments and Mr Blakey said it can “buy electricity in bulk and pass those savings on to our residents”. “Our electricity is renewable,” he added.

He claimed Moda has a “very wide demographic of people living in our developments” and residents can form groups through a MyModa app. In Angel Gardens, Manchester, there are around 90, he said, from gin tasting to cycle clubs.

“I think that the whole element that BTR is somehow an exclusive tenure is just not founded in the facts on the ground,” Mr Blakey added.

Mr Hean said the developments would contribute to Glasgow’s plans to double the city centre population. “The more people we can have living in the city centre the better for the health of the city centre.”

As the BTR market matures, there will be “four or five different price points”, he added. “When you look at the supply of BTR in Manchester, it’s 5.7% of the overall housing stock, whereas in Glasgow it is only 2.3% including the whole pipeline that is proposed at the moment.

“It’s filling a void where councils haven’t had the money to build their own housing stock over the last 10/20 years.”

Mr Blakey said: “We wouldn’t be developing and investing in a city if we didn’t think it would be successful, and, in all of the cities we have been in so far, thankfully our buildings have been highly successful.”

“Glasgow has got great rail, air, a lively nightlife in terms of bars and restaurants and it’s an attractive city to be within.Cities which have got really good universities are important to us as well.

“If there are people living in the city supporting things like retail, leisure, offices then that’s really good. It’s that vibrant sense of lifestyle within a city which we look for as a BTR operator.”