Building a Better Scotland

Scotland has an inadequate and inelastic supply of housing. That’s the conclusion of the RICS Scottish Housing Commission in its report ‘Building a Better Scotland’. They argue that 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.

The report identifies Scotland’s deteriorating housing outcomes: 

• In the best case scenario, it could take more than 20 years (from 2011/12) before enough new homes equate to the projected increase in new household formations; 
• Burdens of paying for housing are historically high for both private tenants (23% of their incomes in contrast to 18% a decade ago) and younger home owners face loan to income ratios of 4 to 5; 
• The number of households in need and applying for social housing is rising sharply, with over 184,000 households on local authority housing lists, whilst social housing output has fallen in the midst of a static vacancy turnover; 
• More households in need are renting in the more difficult segments of the private rented sector: 190,000 Scots in poverty now reside in the social sector, and 120,000 rely on market rental provision; 
• The rate of improvement to social housing is falling, and neighbourhood renewal schemes are small in scale in contrast to a decade ago; 
• Starts in the private sector remain at historically low levels almost everywhere in Scotland; 
• After the 1997-2007 boom, Scottish house prices fell back in the wake of the global financial crisis (GFC) but largely stabilised by 2012, and are now showing signs of significant annual increases in the range of 5 to 10 percent in areas where employment is recovering. 

Put simply, as UNISON Scotland’s own report ‘Making Homes for a Fairer Scotland’ does - we need to build more homes.

The RICS report makes a series of recommendations:

1. a Scottish Housing Observatory is established
2. the Scottish Parliament debates an Annual State of the Scottish Housing Market Report
3. the post of Housing Minister is elevated to a Cabinet Secretary position
4. there should be new and continuing assessment of key housing market indicators
5. the Scottish Government should continue to explore new methods of supporting the housing market to sustain demand
6. the Scottish Government makes an effective private rental housing market one of the key pillars of the future housing system for Scotland
7. the Scottish Government shapes a skills programme for planning
8. the Scottish planning system should deliver at least a 100% increase in effective supply of land for development by 2016, and that all local authorities should be able to demonstrate a 10-year effective land supply as standard
9. the Scottish Government, in partnership with planning authorities, undertakes a review to assess the nature of existing planning consents in Scotland
10. the Scottish Government develops a new emphasis on consumer research to inform a local housing systems analysis approach to assessing housing need and demand in Scotland.
11. the Scottish Government establishes a Scottish Land Delivery Agency (SLDA)
12. the Scottish Government endorses effective provision in growing areas by enabling the delivery of six to eight major new communities
13. there is a reduction in VAT to 5% on refurbishment and maintenance building works
14. the Scottish Government puts in place a change fund for the social housing sector
15. the Scottish Housing Regulator should take a greater role in effecting system performance knowledge and change in Scotland.

While it is hard to disagree with the thrust of these recommendations, they are very process driven. It may be true that there is not a simple single factor that will solve Scotland’s housing problems, but there are a few absolute essentials. The UNISON Scotland report argues that building more social housing is the most important of these.

The recommendations are also weak on the recent rapid growth of the private rented sector. It largely ignores the need for better regulation and rent controls, at a time when private rents are rising twice as fast as wages. The vast majority of those in private rented accommodation are not there by choice. Only 6% of private renters want to be in that sector, most want a secure social housing tenancy. The campaign group Generation Rent, has recently launched its Renters’ Manifesto that highlights these issues.

Housing policy in Scotland has been diverging from the rest of the UK since devolution and constitutional change, whatever the outcome of the referendum, could enable further change. In particular, the devolution of Housing Benefit provides the scope for a more creative solution. This point has recently been articulated by housing bodies including, CIH, SFHA and Shelter.

The RICS report is therefore a welcome contribution to the debate, but perhaps lacks the radical edge needed to tackle what is a growing housing crisis.