Building for the future

According to a major report published in the summer, the country is confronting an “inadequate and inelastic” supply of housing. The RICS Scottish Housing Commission, which published the work, was established in October, and made a series of recommendations about what could be done to address some of the major housing issues in Scotland. 

Commission chairman Tom Barclay said its task was to actively listen to stakeholders, practitioners and wider experts, and, from that, look to establish a list of key recommendations which could, if implemented, “make a fundamental difference in how we tackle Scotland’s housing crisis”. He added: “This commission concludes that whilst the main problem we confront is an inadequate and inelastic supply of housing, there is not a simple, single factor that can solve this difficulty. Development, planning, design, management, finance and taxation systems, singly and together, all shape Scotland’s housing challenges. A smarter Scottish housing system, with better outcomes, will not emerge from some fast individual measure or sector change. However, we have scoped and phrased our recommendations in order to give momentum to rethinking housing in Scotland.”

In the report, the commission suggests creating six to eight new communities in Scotland. These could be formed as new towns, strategic regeneration within existing towns or as extensions to current locations of growth. Some of the other recommendations include establishing a National Housing Observatory by expanding the Scottish Government’s housing policy advisory group; elevating the post of Housing Minister to a Cabinet Secretary position; and making an effective private rental housing market one of the key pillars of the future housing system for Scotland.

The commission also made a number of recommendations for planners. The report states that the Scottish Government should shape a skills programme for planning, while the planning system should deliver at least a 100 per cent increase in effective supply of land for development by 2016.
Commissioners said the Scottish Government should establish a Scottish Land Delivery Agency which would have the key purpose of sourcing “generous, effective and regular supply of land for housing development” and supporting the delivery of serviced sites. It has also called for the reduction in VAT to five per cent on refurbishment and maintenance building works.

Barclay, who is also immediate past chairman of RICS Scotland, said: “This commission’s recommendations are not considered to be granular, but systemic in nature, and the views of the commissioners as a collective, having heard and read the ‘evidence’ gathered, and then having debated the issues arising.”
He added: “The report also suggests that a greater level of attention toward the private rented sector could help alleviate pressure on the market. According to [a recent] RICS Residential Market Survey, a net balance of 25 per cent of chartered surveyors reported a rise in tenant demand within the private rented sector, with respondents reporting growth in demand through 2014.

“The report further recommends that the Scottish Government put in place a Change Fund to support the social housing sector. The social housing sector has the potential to play a major role in delivering smarter and better housing outcomes in Scotland. However, in terms of finance, evidence from lenders suggests that the risk rating of the housing association sector in Scotland has increased as a result of welfare and pension reforms, as well as a reduction in capital subsidies.

“The fund would facilitate potential partnerships (both constitutional and non-constitutional), helping shape new business models, evaluate transfers of stock between organisations, and, in essence, help provide a stimulus to give greater vitality to the sector.”

He also stressed that the report does not claim to represent the policy views of RICS Scotland or its members, but instead those of the RICS Scotland Housing Commission alone.

Responding to the commission’s work, the Scottish Government said: “The Scottish Government welcomes the work of the commission and the report as a constructive contribution to the debate on how we meet Scotland’s housing needs. Scotland is outperforming other parts of the UK for all completions and this has been the case throughout the 2007/08 to 2012/13 period. We are taking action to increase the supply of affordable homes, deliver vital support for the housebuilding industry and support economic recovery. Our investment of more than £1.7 billion in affordable housing during the current parliamentary term is helping to deliver our target to deliver 30,000 affordable homes.

“We agree with the report findings that increasing housing supply is vital and will consider the recommendations in developing existing work including the Housing Policy Advisory Group, our response to the Land Reform Review and the work to support the major 18 November housing delivery event.”

Official figures published last month reveal the number of new homes in Scotland has risen by seven per cent in the last year, the first annual increase since before the recession. The new figures show that 15,957 new homes were delivered in Scotland in the year to March 2014, compared to 14,895 in the previous year. This is the first increase since 2007/08.
The figure includes new build housing, rehabilitations, and conversions. Private sector house building and housing association rehabilitations accounted for the largest share of this growth, with private sector-led new build completions rising nine per cent on the previous year, to 10,686.

The latest statistics also confirm that the Scottish Government remains on track to deliver on its target of 30,000 new affordable homes by 2016.

Housing Minister Margaret Burgess said: “It is encouraging to see that the number of new homes in Scotland has risen in the last year, driven in large part by an increase in the number of private sector completions. This is the first annual increase since before the recession, reflecting the growing confidence within the housing market, which the Scottish Government has helped to stimulate through investment in initiatives designed to support the sector, and help people into home ownership.

“Nonetheless, new housing supply remains well below pre-recession levels and I recognise that the house building industry continues to face a number of challenges. We are committed to working with organisations across the housing sector to address these, and work towards the shared goal of securing a sustained increase in housing supply. While we are making progress, the powers of independence would provide full flexibility over budgets, investment and innovative financing, allowing us to do even more to support the supply of new homes.

“The statistics also confirm that our Affordable Homes Supply Programme is performing strongly, with completions, approvals and new starts all up on the previous year. Since 2011 we have delivered more than 21,000 new affordable homes, bringing us over two-thirds of the way towards our five-year target of 30,000 new homes. We have also delivered over 15,000 homes for social rent, bringing us three quarters of the way towards our five-year target of 20,000 new homes.

“Council house building figures are at a 25-year high in the year to March 2014, with 1,140 new council houses built in Scotland. Over 4000 new council houses have been delivered through the Scottish Government’s Council House Building Programme since 2009. The supply of affordable housing continues to be a high priority for us, and we are working with the entire sector to increase the supply of affordable homes and deliver vital support for construction and house building companies throughout Scotland. This commitment is underlined by our £1.7 billion investment in affordable housing over the current parliamentary term, supporting an estimated 8,000 jobs each year.”