Following extensive market engagement, Scottish Government has launched the Rental Income Guarantee Scheme (RIGS) to help kick start the Build to Rent sector in Scotland.
RIGS is a key component of a wider set of measures and positive interventions designed to facilitate the growth of the Build to Rent sector in Scotland.
Further details about the Build to Rent Opportunity in Scotland can be found here.
RIGS offers a Scottish Government guarantee of a slice of the core rental income forecast to be generated by eligible units during the initial years of the operation of a Build to Rent development, when letting risk is likely to be at its highest.
The guarantee period will run for either three or five years from completion of units, depending on an applicant’s requirements.
During any year of the guarantee period, if actual annual core rental income as a percentage of an agreed annual core rental income forecast (“the ARIF”) for that year is less than 95% but greater than or equal to 75%, the participating investor will be entitled to payment of a guarantee amount which is equal to 50% of the difference between (i) 95% of the ARIF for that year; and (ii) the actual annual core rental income for that year.
Alternatively, if the actual annual core rental income as a percentage of the ARIF is less than 75%, the participating investor will be entitled to payment of a guarantee amount which is equal to 10% of the ARIF for that year.
| Actual annual core rental income as a percentage of the ARIF for year X |
Guarantee Amount |
|---|---|
| Less than 100% but greater than or equal to 95% | The amount which is 0% of the ARIF for that year |
| Less than 95% but greater than or equal to 75% | The amount which is 50% of the difference between (i) 95% of the ARIF for that year; and (ii) the actual annual rental income for that year. |
| Less than 75% | The amount which is 10% of the ARIF for that year. |
For more information please refer to the RIGS Information Note and the Form of Guarantee.
Alternatively, contact the RIGS team at info@rigs.rent if you would like to discuss any aspect of RIGS in detail.
Before submitting a completed Application Form, potential applicants should be satisfied that the following mandatory criteria can be met:
all eligible units are (or will be) in Scotland;
the core rental income to be guaranteed will be generated by at least 30 eligible units;
the applicant can demonstrate that it has, or will have prior to the guarantee commencement date, good and marketable title to the eligible units;
the intended management and maintenance provider of the eligible units is (or will be prior to the commencement date) registered as a managing or letting agent with the relevant Local Authority under applicable legislation; an accredited letting agent with Landlord Accreditation Scotland or any replacement body; and compliant with any applicable letting code of practice;
the site on which the eligible units are to be developed benefits from at least outline planning permission for the development;
the long–term financial viability of the eligible units can be demonstrated; and
the applicant has reviewed the terms of the guarantee and knows of no reason why it will be unable to comply with those terms.
Any potential applicant who is unable to fully satisfy the eligibility criteria at this time, or requires clarification, should contact the RIGS team at info@rigs.rent.
The Application Form can be downloaded here.
The application process is outlined in more detail in the RIGS Information Note.
If you would like to discuss any aspect of the application process in detail, please contact the RIGS team at info@rigs.rent.
Completed Application Forms together with supporting documents should be submitted by email to applications@rigs.rent.
Partners
Please email your queries to info@rigs.rent and the most appropriate person within Scottish Futures Trust will respond within 2 working days.
