How housebuilding could help us build back better

Constantin was just getting back on his feet when the pandemic hit in March. After a spell of homelessness, he and his pregnant girlfriend had secured temporary housing and he started work.

But when the job disappeared, the couple were left destitute. Constantin was forced to walk the streets of Glasgow, seeking donations of food and clothing.

“When you are on the street, not showered, filthy, always keeping moving, it affects your mind. You feel so tired. You lose hope,” he said.

The pandemic has shone a light on what a roof over our heads really means.

While it has exposed the stark reality of those who live on our streets, it has also revealed a hidden problem of too many families waiting too long for a permanent address to truly call home.

An estimated 132,000 households are on a waiting list for social housing, according to Shelter Scotland. That number includes 70,000 children or, to put it another way, one in thirty children in Scotland.

Meanwhile, the Scottish Federation of Housing Associations (SFHA) believe this underestimates housing need because of the difficulties of counting those who, while not homeless, are in crowded, inaccessible or otherwise unsuitable accommodation.

The knowledge of this overwhelming need is what led, at the start of this parliamentary session, to the affordable housing supply programme. Alison Watson, director of Shelter Scotland, described this as “one of the more successful things that the Scottish Parliament has done”.

It committed the Scottish Government to building 50,000 new, affordable homes, including 35,000 for social rent. It was backed by £3bn over five years. As we come to the end of the programme in March, the government is on track to deliver 46,000 homes, Watson said, just shy of the target but not bad given the pandemic.

But as the next Scottish Parliament election nears, more is needed. Watson said: “This has been an incredibly successful programme, but we have to treat it as a good start because essentially what we need to do in Scotland is make up for what has been decades of underinvestment in social housing.

“We’re not going to right that in the course of just one parliament. We need a commitment to social housing and housebuilding that transcends party politics, that transcends parliamentary cycles – it’s getting that long-term view of how we get supply permanently fixed.”

Shelter, alongside the SFHA and the Chartered Institute of Housing in Scotland, is calling for the next target to be 53,000 homes (with 37,100 for social rent) by March 2026. It would require £3.4bn.

“It sounds a lot, but it feels to us an aspiration that is very achievable in the context of what has already been achieved,” Watson explained.

“Essentially what we’d be saying to whatever flavour of government we get after the May election is: build just two additional homes on top of the affordable houses that you’re already building and just build one additional social home per day. You’ve done it.”

While yet to commit to a target, the Scottish Government’s draft infrastructure investment plan proposes £2.8bn for affordable and social homes over the next five years. This is slightly less than asked for, but the government said additional funding will be found through other mechanisms.

“We await with interest that detail that tells us what specifically would be the commitment going forward,” added Watson.

Meanwhile, industry body Homes For Scotland (HFS) has a broader target in mind. It wants to see the government commit to an “aspirational target” of 25,000 homes per year across all tenure types. The group argues that the interconnectedness of the housing market means affordable homes must not be the only consideration.

HFS policy director, Fionna Kell, said: “That’s a major ask for us, to have government recognition of roughly 25,000 homes per year and a very clear statement of intent, both from central government and also working its way down to local government level, that building new homes is a priority for Scotland.”

The housing sector could prove to be vital in mitigating a COVID recession, a point recognised by Benny Higgins, the former banker who authored the Scottish Government’s report on economic recovery in July last year. His advisory group recommended the government accelerate investment in housing because of the role it plays in the economy, social policy and climate goals.

Kell agreed: “Overall, it’s important to recognise both the economic and social value of new homes. We estimate that each new home built supports about four jobs in Scotland and for every £1 that’s spent in construction, another £1 is spent elsewhere in the economy as a result of that. The economic impact and multipliers are quite significant. That’s in addition to the social benefit of actually providing the homes that people need.”

If you are going to be building a house in five years’ time, you have started the planning for building that house today

The pandemic hit the sector hard. In the first lockdown, construction workers across the country had to down tools and stay home.

HFS estimates in those three months, 6,000 homes that had been due for completion weren’t. And even as building sites could reopen, the need for social distancing slowed productivity, meaning fewer houses were being completed than planned for the rest of the year.

A commitment to a new major housebuilding programme now would give the firms and lenders confidence in a sector which has long lead-in times and narrow margins.

Kell said: “I think what’s important to note is housing takes a long time to deliver. It doesn’t fit nicely within parliamentary cycles or local government election cycles, and nor should it be a single party issue. It should be across all parties and across the broader political cycle.

“If you are going to be building a house in five years’ time, you have started the planning for building that house today. I think it’s about seeing the long-term nature of homebuilding and making sure we’re planning today for what’s coming in five, six, seven years’ time.”

And regardless of what happens to the wider economy, housing demand will endure.

“If the economy as a whole continues to weaken, then that undoubtedly will have an impact. However, the fundamental still remains: Scotland still does not have enough homes,” Kell added.

The truth behind that statement is already clear, but housing experts are concerned the pandemic could exacerbate the problem.

At the same time many people became unemployed or saw their incomes drop, housing costs increased. House prices across the UK grew and private rents in Scotland rose above inflation throughout 2020.

Watson said: “People [are] getting increasingly worried about being able to keep up with their housing costs. This is about people getting into debt, into money worries, as a result of the pandemic and being worried about keeping up with rent and mortgage payments. That is becoming a higher volume issue and a more acute issue.

“I think obviously the longer the pandemic goes on, the longer lockdown goes on, we have to anticipate a deeper and longer economic fallout. I think we’re potentially looking at a tsunami of rent arrears.”

As people become unable to afford private rents or even think about saving up a deposit to buy, social housing will bear the brunt. But there’s already not enough of it.

Currently 1.2 million people are living in social housing in Scotland. Half of them are in homes owned by councils and the other half owned by housing associations.

Sally Thomas, chief executive of the SFHA, warned that “even before the pandemic, but especially now and especially in the years to come” there will be increased demand, partly driven by the pandemic but also because home ownership is in decline.

She said: “Our view of social housing is not only as a great home in a great place and support to stay there on a successful, healthy and good basis for however long you need it, but it’s to change the housing system, not just because we want to change it per se, but because it is changing.

“We need to make sure that social housing is a positive part of that change, that homes are there to anticipate that change and mean that people still have a great home to live in, even though it might not be a home they own or a home they privately rent.”

Part of the equation is the quality of homes, as well as quantity. Plenty of people have been working from kitchens and dining tables and bedrooms throughout the pandemic because of a lack of space, while mental health has suffered as people’s access to outdoor and community space has been limited.

Thomas said: “We’ve seen a really strong appreciation on the part of government in recent months on the value of a home not only as a roof over your head and four safe walls, but in enabling you to live other parts of your life in a way that you couldn’t otherwise.

"You can work at home, you can home school your children at home, a home can keep you safe… It’s all these things that a home can give you over and above a roof over your head.”

She also expects demand for social housing outside of urban areas will increase as people continue to make use of remote working options, as long as there is good broadband.

The sector regards the action taken by the Scottish Government in the last five years as positive and much of the ask is to build on those foundations. To its credit, the government has allocated interim funding of £500m for affordable housing for 2021-22 until a firmer decision can be taken on the long-term.

Housing Minister Kevin Stewart said: “[This] helps provide funding certainty for local authorities and housing associations and will help the economy and the construction sector to recover from the pandemic while ensuring we maintain momentum in the delivery of social and affordable homes to those who need them.

“COVID-19 has underlined the value of home as a safe place to live and our homes will also now be somewhere many of us work from. Our programme for government confirmed that we will develop guidance this year to ensure all new social housing offers private or communal outdoor space with room for people to sit outside and space for home working or study.”

A 20-year strategy to be published later this year, Housing To 2040, will acknowledge that housing has an important role to play in meeting many of Scotland’s ambitions – ending poverty, eradicating homelessness, tackling climate change – as well as in the economic recovery.

As for Constantin, he, his partner and his baby boy moved into a permanent social home in October. He said: “My nightmare is finished. I have somewhere to come back to. It gives me hope and the power and strength to carry on.”