Planning for build-to-rent: a tale of two cities

This article is the second in a series by the Living Sector team at Burness Paull on the outlook for the build-to-rent (BTR) sector in Scotland.

You can find the previous article here.

In this article we will consider everyone’s favourite topic – planning.  And it’s not all bad news!

I will take it as read that we are all familiar with the various challenges facing the planning system and instead consider what good planning for BTR should look like.

I am a big fan of history – I think it’s an age thing – so I am always interested to look over my shoulder to see where we have come from, when considering where we are now and where we are going.

But before we delve back into the mists of time, it is worth noting that, as matters stand, the two key planning issues/barriers for BTR are policy certainty and viability.

With that in mind, looking back at the development of the Scottish Government’s “private rented sector” strategy and “build-to-rent” planning policy over the last ten to fifteen years is quite interesting.

In 2013, the Scottish Government published “A Place to Stay, A Place to call Home: A Strategy for the Private Rented Sector in Scotland”. At this time, BTR was emerging as the new kid on the block and had top level political support. In 2015, the Scottish Government commissioned another report, “The Build to Rent Opportunity in Scotland”, which was essentially an investment prospectus, promoting Scotland as a BTR destination of choice for inward investment. It promoted BTR as the solution for the unmet need for high-quality private rented accommodation in Scotland and promised policy interventions to help create an attractive planning and investment landscape to support the growth of the BTR sector. Things were looking good.

BTR planning policy was still very much in its infancy at that time. The government sought to move things forward with the publication in 2017 of Planning Delivery Advice (PDA) on Build to Rent. Its aim was “to raise awareness of an emerging sector of housing delivery” that could “be a material consideration in the determination of planning applications and appeals”. For the most part (it was only two and half pages long…) it defined and described the key characteristics of BTR to help explain and demystify this new housing typology. However, it also positively extolled the virtues of BTR development, including its potential to deliver housing at pace and scale and support economic growth, whilst highlighting the viability challenges faced by BTR developers. 

The guidance gave planning authorities a clear steer to take a “tailored approach” to developer contributions and the provision of affordable housing, as well as a “flexible approach to relevant elements of design” and “the need for consideration of flexibility in relation to density, minimum space standards and single aspect units where the overall quality of the development remains appropriate”. These were encouraging signs for the sector.

For whatever reason, the recently (2023) adopted national planning policy didn’t really follow through on the developing policy position for BTR. It recognised it as a type of housing, but only in passing. BTR gets a side mention in the key housing policy alongside self-provided homes, homes for older people, and homes for other specialist groups such as service personnel (amongst others), as development proposals that will be supported if it is shown that they improve affordability and choice by being adaptable to changing and diverse needs, and address identified gaps in provision. It is far from emphatic policy support and lacks detail.

Meanwhile, at the local level, in Scotland’s two largest cities, things were bubbling away behind the scenes. Edinburgh and Glasgow had both adopted local development plans in 2016 and 2017, so it’s no surprise they didn’t say too much about BTR. However, in the background, both recognised the emergence of this new sector and took forward initiatives to support the development of BTR.

Edinburgh approved Intermediate Rent as an affordable housing tenure for BTR, which gave certainty to developers on that particular issue.

Glasgow has been more proactive, and in 2024 published planning guidance on large-scale co-living, setting out a policy position and space standards framework against which planning applications could be assessed. That was a very welcome development, which has now been followed by the inclusion in Glasgow’s emerging development plan, “City Development Plan 2”, with a discrete policy on “purpose-built, or large-scale co-living accommodation” as part of its policy position on “managed accommodation”. These policies sit alongside its policy on “mainstream accommodation”, which includes conventional (i.e. self-contained) BTR.

Clearly the devil will be in the detail of these emerging policies, but they do at least deliver a high degree of policy certainty. The representation period will take place between 21 August and 18 November 2026 at which point all documents will be available. Full details will be available on the CDP2 Information Hub.

So, what about viability?...

At the end of last year, the Scottish Government published its updated guidance on planning obligations – Planning Circular 4/2025 on Planning Obligations and Good Neighbour Agreements. It, somewhat meekly in my opinion, recognised the impact of contributions on the viability of a development, which it said “may be relevant to the policy tests”. 

Referencing this new guidance, CDP2 has offered up a much stronger policy position on the importance of viability, encouraging applicants to seek early engagement with officers on “expectations for on-site infrastructure, off-site developer contribution requirements and, where appropriate, early discussion on viability”. This is much more positive and sends a clear signal to developers that the council is interested in having the conversation on a focused and balanced basis.

At the other end of the M8 there is still a bit of a policy vacuum. Edinburgh is in the early stages of preparing its next local development plan, City Plan 2040, having only just last week submitted its evidence report to the Scottish Ministers.  Assuming it gets the green light, the council will take forward the preparation of City Plan 2040 in October, with a view to putting it out for public consultation at the end of next year (2027). This means that Edinburgh will have the benefit of seeing what happens with CDP2 in Glasgow and can hopefully use that as a basis for developing out its own detailed policy position.

So, after a slight hiatus, the policy position in support of BTR continues to develop in a positive direction.  That is good for developers and good for investment.  From a personal perspective, I would like to see the Scottish Government do more to support its development. Its plans for “tackling Scotland’s housing emergency” do mention BTR, but mainly through reference to the support being provided by the Scottish National Investment Bank.  It would be good to see the new Cabinet Secretary for Social Justice and Housing come out in favour of the sector.  The SNP’s “First 100 Days” paper didn’t say too much about housing, so we will need to wait and see what the programme for government includes when it is published in September.

As a final word, there are positive signs that the planning position in Scotland is getting into shape to support BTR in Scotland, and there is plenty opportunity to engage and influence what it will look like in the future.

If you would like to discuss anything raised in this article, please get in touch with Alasdair Sutherland or your usual Burness Paull contact.

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