Owner system

Caregiving Housing Task Force chairman questions whether Scotland’s legal system is fit to spur growth

Caregiving Housing Task Force chairman questions whether Scotland’s legal system is fit to spur growth



According to a new group established by ARCO and Sovereign property company.

Andrew Fyfe

Currently, older people in Scotland have less than a tenth of the supply compared to New Zealand, the United States, Canada or Australia. Although England has low levels compared to these established nations, supply and investment are much more promising than Scotland.

According to figures recently released by Knight Frank in its annual review of senior housing 2021, the total capital committed to senior housing this year is £ 1.85bn, up from £ 1.35bn the year before. Most of this money is spent on English developments and planning requests for Scottish senior housing developments are rare.

For Andrew Fyfe, Director of Sovereign Property Partnership, a major difference is the legal landscape, in particular as regards the structure of the lease system in Scotland. The problem revolves around the imposition of exit fees in retirement developments, which often make the difference between making a development viable or not.

Peter Chambers of Burness Paull said: “Long term leases are often used in England to give operators the necessary control over future housing. This is currently not possible under Scottish law, so it is desirable that operators and advisers in Scotland agree on a suitable and industry-accepted model – this is one of the aims keys to the Scottish Caregiving Working Group.

Tracey Menzies from Brodies and Christine Stuart of TC Young examined how the shared ownership system might solve this problem.

“This tenure model provides the ability to manage some of the risks, responsibilities and interests of the provider and share owner (s). The Scottish Supported Housing Working Group is investigating whether producing improved standardized shared ownership documentation could create a robust model that fosters trust among developers and older people.

Rodney Whyte offers a different solution, but one that will require action by the Scottish Legal Commission and, ultimately, the Scottish Ministers to function.

“A de-application of the automatic right to buy back standard securities after 20 years in the context of tailor-made housing later would facilitate a strong legal structure based on ownership and a basis on which to attract the necessary investment in the product to Scotland.”

Recently the group received support from MSP who are keen to see care housing become an established form of housing in Scotland to ensure that Scotland’s aging population has a range of housing to suit a variety of needs.

Andrew Fyfe, Chair of the Working Group, said: “It is fantastic to have the engagement of lawyers and MSPs at this early stage and we look forward to presenting our findings in May / June of next year. in parliament. Scotland has a fantastic opportunity to learn from countries like New Zealand which have a stronger housing and care industry. The industry needs regulation to ensure that care housing developments are clearly defined and offer consumers a fair and transparent deal when they move in. Tackling legal issues now will make it easier for investors to engage in Scotland, ensuring our older population has a greater choice of accommodation to meet their needs.