Growth mirrored by deposit scheme, which has paid off loan and is preparing the ground for first grants next year
No longer a temporary stop-gap for students and young people on the verge of joining the housing ladder, private rental has more than doubled in the past decade and now represents an estimated 13 per cent of all households in Scotland.
Growth has been driven by reductions in social housing – as well as the financial barriers faced in recent years by potential first-time buyers – and this rapid proliferation has created a market in flux. Delivering his draft budget last week, Deputy First Minister John Swinney announced a £90 million boost for affordable housing, while also imposing a 3 per cent surcharge on the purchase of second homes. The latter – which follows a similar move last month by the UK Chancellor – is intended to free up properties for first-time buyers, but landlords have warned it could lead to a shortage of homes for rent.
Meanwhile, legislation aimed at creating a private rented sector that is “fit for purpose” continues to evolve, with Scotland’s new Private Housing Bill expected to come into law early next year. This will affect both tenants and landlords, with provisions covering security of tenure, rent control and repossession.
So, what might the market look like in five years’ time? Jen Paice of SafeDeposits Scotland says that’s a “crystal ball” question, but her organisation is gearing up to ensure that everyone involved is kept abreast of developments.
“The private rented sector is still needed and is still growing,” she says. “As the only not-for-profit in our field, our aim is to promote education and best practice in the sector.”
Set up in 2012 to accommodate the first wave of new regulations, SafeDeposits protects tenants from landlords who unfairly deduct or withhold deposits by keeping this money in a ring-fenced account. Landlords in Scotland must register with it or one of two other licensed schemes – MyDeposits or LPS – and lodge a renter’s deposit within 30 working days of a tenancy commencing.
A partnership between landlord, letting agent and tenant groups, SafeDeposits got off the ground with a £1 million loan to be paid off from interest accrued on the money it holds. Repayments were expected to stretch up to 2019, but after smashing initial forecasts, it is now stepping up to the second half of its remit.
“Everyone involved in the beginning thought we would get a third of the market – basically our share of the three-way split,” Paice says. “But because we are the only scheme based here, and are out there talking to people in the market all the time, we now have a 60 per cent share, which is more than £68m of deposits. We paid off our loan in September, and now we can start putting money into the trust, which will award its first round of grants in March of next year.”
Cash from the SafeDeposits Scotland Trust will be available to raise awareness of tenants’ rights, encourage best practice among landlords and agents, or support research into the private rental market – anything that promotes professionalism in the sector.
It’s the combination of a corporate business with a customer service feel that appeals to Paice, who has experience in both camps, as well as the areas where the two intersect.
A native of Glasgow, she spent seven years in sales with a software company in Oxford before joining Scottish Development International in 2007, a job that immediately took her abroad to New York. As vice-president of financial services, she pitched Scotland as an ideal UK base to Wall Street behemoths such as Citigroup, JP Morgan and Morgan Stanley, but after a couple of years she was ready to come home.
“New York wasn’t really ‘real life’ – it was a great life, and I had a lot of fun and I think something like 3,000 jobs came to Scotland during the time I was there,” she says. “But I was getting into my 30s and was starting to think about settling down.”
She returned to SDI’s Glasgow office as the recession was taking hold in 2009, and focused on managing the fall-out from the financial crisis until the birth of her first son in July 2010. After nine months on maternity leave, she returned to take up a secondment at Lombard Corporate Asset Finance, a subsidiary of Royal Bank of Scotland. From there she became director of corporate social responsibility at Lombard, which also encompassed the organisation’s sustainability and inclusion agendas.
With the chance to help “make a difference” in the rapidly-evolving private rental market, Paice applied to become the first chief executive of SafeDeposits Scotland. She took over in October 2013 from managing director Malcolm Lindo, who steered the group through its initial setting-up phase.
Under Paice’s guidance, the organisation has increased the number deposits held by more than 22,000 to 100,000. With no plans to expand outside Scotland, Paice is instead focused on boosting marketing to raise awareness of both the scheme and its sister trust.
“There is still market share to be made,” she says. “There are always new properties coming in.”
30 SECOND CV
Born: Glasgow, 1976
Education: Glasgow Caledonian University
Ambition at school: I wanted to be a doctor
First job: My brother had a bacon round, and he decided he didn’t want it any more, so I took it over
Can’t live without: My children, iPhone and my bed
Kindle or book: I like the feel of a book, and I like browsing in book stores
Favourite city: New York
Preferred mode of transport: Car
What car do you drive: A Land Rover
What inspires you: My children inspire me to do well in my profession and be successful
Best thing about your job: The people I work with, and the commitment they show