The Scottish Government has revealed plans to a new country-wide housing initiative.

The Private Rented Sector (PRS) Rental Income Guarantee could deliver thousands of purpose-built homes for private rent.

Under the initiative, the Scottish Government would share a proportion of rental income risk associated with large-scale new developments.

The proposed scheme is intended to compensate owners for a financial shortfall in qualifying projects arising as a result of lower than projected rental income

As a result, it is estimated 2,000 additional homes could be developed in the new build-to-rent sector, with the potential for thousands more when combined with other measures.


The initiative was one of the key recommendations made by Scottish Government-supported PRS Champion Gerry More, who is advised by the PRS Working Party.

Social Justice Secretary Alex Neil said the scheme is designed to give investors "greater confidence during the early stages of letting and managing the homes."

"I see the private rented sector playing a major role in the expansion of our housing supply, and we are determined to continue to make Scotland an attractive place for investors to operate in the long term," he said.

"We want to test the rental income guarantee proposal with the market to ensure it is the right tool to deliver on the significant potential for investment that currently exists."

Nicola Barclay, Chief Executive of trade body Homes for Scotland, which initiated the research leading to the announcement, added: "As part of a wider market approach across all tenures, expanding the supply of purpose-built private homes for rent is crucial to ensuring Scotland has enough homes of all types to meet the diverse housing needs and aspirations of all those living here."

Investors, developers, property advisors and other stakeholders are invited to comment on the proposed scheme by 22 April.

(LM)