Glasgow £200million flats plan paused by Get Living

Build-to-rent specialist Get Living has paused plans to build 1500 homes on the former College Street Goods Yard on the city’s historic High Street, a site that has been derelict for decades reports our sister title The Herald.

Measures were approved in March to extend a 3% cap on private rents, introduced in response to the cost-of-living crisis, until at least the end of September but there is a plan for more permanent legislation.

Glasgow City Council is aiming to double the population living in the city centre to 40,000 over the next 10 or so years.

Rick De Blaby, chief executive of Get Living, said he was acutely aware of the financial pressures most people were experiencing from speaking "on a daily basis" to the residents they served.

However, he added: "Companies like Get Living, they are effectively owned and funded by big global pension funds.

"My shareholders include pension funds from the UK, Canada, Australia and Holland and a lot of those are for public sector workers.

"When I go to them and say I want £200million to undertake a scheme in Glasgow and the fundamentals are really strong but the top-line revenue can't be controlled by us, it's actually controlled by government, [and I say] can I have the same £200million to do the same project in Manchester or Leeds, it's a really short conversation.

"We have to draw that balance all the time on how we deliver homes that people can afford and want to live in and still enable some return to the pension fund owners and the tens of millions of pensioners that are affected."

Mr De Blaby said the company acquired the site in 2017, support was high for the project among politicians and councillors and planning consent was achieved "fairly quickly."

He told our sister title The Herald: "We bought that with the very strong conviction, which still prevails today, that Glasgow is very strong economically but with an evident lack of housing in the city centre. 

"We felt that our rental housing model would really serve a particular audience at the moment which only has a choice of renting off buy-to-let landlords.

"The UK is somewhat in the slow lane in terms of GDP at the moment, it's very anaemic growth we've got.

"Levels of capital investment in the country are pretty low, productivity improvement seems to be elusive.

"If we are going to set up the UK and Scotland for success we have to make sure that the companies that are going to deliver that success are set up well and those high-performing companies that we are all after will predominantly recruit the best talent they can find and those people need somewhere to live.

"Generally speaking they like to live in city centres, they like the freedom of renting and they deserve really good quality housing in nice public realm, backed up by exemplary service, where they can feel they belong somewhere and that's exactly what our model is about.

"Companies like ours are part of the solution at a time when house builders are not building as much as they were."

The Scottish Government defended the rent cap saying its emergency legislation has been protecting tenants from significant rent rises and said the measure did not affect new tenancies.

"It is correct but once you are in, obviously then there is a restriction and at the end of the day it goes to the value of the asset," said the chief executive.

"An asset where the revenue starts at one level and is controlled at the rate it can grow will attract a different rating to the one that is un-regulated.

"We just happen to be at a moment when the viability of these schemes is very challenging.

"We would love to find a way to start in Glasgow because we know there is a high demand and we think we can do a special regeneration that everyone can be proud of.

"[But] while there is a choice of investing in a regulated environment and one that's not...

He added: "We are not a house builder who buys and sells things and then leaves everyone to it.

"You make no cash profit for three or four years and you tend to catch up when the place becomes established.

"What we've been trying to explain to politicians is that we might be able to start it at an un-regulated level but if you put a limit on how we grow the rents after that it does impact the model because generally, we discount pretty hard at the start to get people in."

It comes after Glasgow City Council leader Susan Aitken told our sister title The Herald that the city centre was experiencing record investment with more projects in the pipeline.

Glasgow Labour MSP Paul Sweeney said he agreed with the rent control policy in principle but said the measure was, "too much of a blunt instrument".

He said: "Introducing a rent freeze and eviction ban was the right thing to do to protect financially vulnerable tenants in a cost of living crisis, though it is disappointing that the Scottish Government and Glasgow City Council are clearly failing to provide investors with the comfort they need to build housing that is in such high demand. 

"Sites in Glasgow like the old College Goods Station off the High Street that have been derelict for decades are seeing exciting proposals for housing development stall, despite having planning consent granted, because our current local and national leaders lack the ability or will to reassure developers and investors that Glasgow is as good a place to invest their capital as Manchester or Leeds."

Aditi Jehangir, Secretary of tenants' rights group Living Rent said private developers were attempting to force the government to squash regulation simply because it, "might impact future profits."

She said: "The build-to-rent sector is holding our housing to ransom, using threats of leaving the market to try and force the Scottish government to undermine legislation that will benefit tenants."

A spokeswoman for the Scottish Government said: "Since April, landlords have been able to increase rents by 3% or 6% in specified circumstances, and the rent cap and additional evictions protections can only be in place until March 2024 at the latest, if approved by Parliament.

“For purpose-built student accommodation, emergency rent cap provisions were suspended at the end of March.

"The temporary rent cap only ever applied to in-tenancy rent increases and would still have allowed for rents to be increased for future academic years.

“We believe that a well-regulated private rented sector is good for landlords and tenants and can be attractive to investors.”

Get Living’s £2bn portfolio includes 3,000 homes for rent across three neighbourhoods – East Village and Elephant Central in London, and New Maker Yards at Middlewood Locks, Manchester.

Earlier this year the Scottish homebuilder Springfield announced a dip in profit and said it would stop taking on long-term affordable housing contracts until market conditions improved.