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Home straight: housing in Scotland

Home straight: housing in Scotland

In an independent Scotland, with full flexibility over its budgets, we are told future Scottish Governments would be able to broaden action to make more affordable housing available to alleviate homelessness and tackle fuel poverty; as well as take action to further improve the quality of housing and explore different ways of supporting first time buyers. But with the outcome of the referendum far from certain, what does the situation look like in Scotland right now?

“Housing is a priority for this government and we will continue to invest in new affordable homes across Scotland,” First Minister Alex Salmond said during a visit to Bathgate to announce an investment from the Scottish Government which will provide 35 new affordable homes for rent.

He added: “We have boosted our budgets for new affordable homes considerably and in the period between April 2012 to March 2016, investment in affordable housing will exceed £1.3 billion. [This] announcement will allow for the completion of 35 affordable flats in Bathgate, which will not only provide high-quality homes, but also support the local construction industry. There are at present about 15 people working on site, but this number will peak to around 45 when the site becomes fully operational.

“We are doing all we can to facilitate the industry’s recovery, deliver more affordable homes for people across Scotland and protect and create jobs. We are on track to delivering our commitment of 30,000 affordable homes during the lifetime of this Parliament despite the severe cuts to our budgets by the UK Government.”

However, despite these reassuring words, the housing situation in Scotland is far from rosy. In October, the Royal Institution of Chartered Surveyors (RICS) Scotland launched an independent, short-term housing commission designed to deliver a sector-wide view of the current condition of the Scottish housing system. While the commission is not due to publish its findings until the spring, it shared its initial findings with Holyrood.

Commission chairman, Tom Barclay, who also chairs RICS Scotland, said: “It’s important to note here that the final observations and recommendations will be those of the commission as a whole, and should not be confused with RICS policy positions. That said, we heard from a variety of stakeholders on the current condition of various elements of housing in Scotland’s housing industry.”

The key aspects emerging from the commission so far include:

Planning:

  • There needs to be greater clarity around Scotland’s housing need to ensure a truly effective land supply is established that can deliver results
  • Strategic planning needs to be elevated in corporate and political agendas, which resist ‘short-termism’, and link long term master planning approaches with infrastructure and delivery

Funding and building:

  • Concerns were heard over a disconnection appearing between housing price and earnings ratio and the consequential impact of any upward interest rate movements
  • Economic supply chain pressures at all levels were also of concern. This included materials – in terms of availability and cost, skilled people supply, and the constructor and developer sectors’ access to affordable growth finance
  • Additional concerns were raised over the complexities experienced around project delivery, the rising efficiency standards, and associated capacity and risk issues across the sector

Managing:

  • The current condition of Scotland’s owner-occupied stock appears to be an urgent priority in many communities
  • In regard to the private rented sector, it would appear that a strategic focus is required
  • Additionally, leadership and investment are necessary for any successful, scalable intervention.

Barclay added that the commission had found the need to make a better case for housing investment with consequential returns across growth, health, wellbeing and attainment agendas for the whole of Scotland

Last month, the National House Building Council reported a 21 per cent increase in new home registrations in Scotland.

Homes for Scotland represent the country’s private home building industry. Its membership of 180 private home building, registered social landlord (RSL) and associate member companies provides 95 per cent of all new homes built for sale in Scotland each year as well as a significant proportion of affordable housing. Chief executive Philip Hogg said the figures were encouraging, signalling good news for Scottish jobs, the economy and those looking for warm, sustainable homes across all forms of tenure.

He added: “Clearly, initiatives such as Help to Buy (Scotland), which has already received over 1,200 applications in just a few months, and the MI New Home 95 per cent mortgage indemnity scheme, which has generated around £100 million of sales activity, have had a major impact on the ability of people to buy. The challenge now is to ensure that this increased activity in the housing market is sustained so that it translates into the building of the many thousands of new homes needed in Scotland.

“Unfortunately, however, this is not as simple as turning on a tap. Whilst our members are rising to the challenge of building more homes in response to the significant recent upturn in consumer demand, the economic downturn has had a devastating impact in terms of industry capacity meaning any recovery must start from a very low base. It is therefore imperative that major supply-side issues such as development finance, land supply and skills shortages be addressed if output is to increase to the levels required.”

Minister for Housing and Welfare Margaret Burgess told Holyroodthat providing affordable housing is a key priority of the Scottish Government and for her.

She added: “Housing is not just bricks and mortar, it’s about people and their quality of life. To have that you have to have a decent home, and every one of us is entitled to a home that meets our needs and is affordable. A key priority of the Scottish Government is affordable and social housing. Over the next four years we’ve committed £1.35 billion in affordable housing and we’ve set a target of building 30,000 affordable houses in the lifetime of the parliament, 20,000 of which would be for social rent and we’re on target to do that.

“There’s nothing the Scottish Government does in terms of housing which we do without consultation with our stakeholders. Stakeholders are important to us and we recognise the challenges they’re facing.”

Last summer, the Scottish Government announced local authorities and RSLs would benefit from a £44m increase in housing subsidies, allowing them to create more social housing. The government said the move would give councils and housing associations an extra £16,000 per home. A report released at the same time recommended introducing higher subsidy levels and was put together by a short life working group, with representatives from the Chartered Institute of Housing Scotland, the Scottish Federation of Housing Associations (SFHA), the Glasgow and West of Scotland Forum, the Association of Local Authority Chief Housing Officers and the Convention of Scottish Local Authorities (COSLA). Prior to this change, councils received up to £30,000 towards the cost of building a new home; RSLs got around £42,000.

Speaking about the increase, Burgess added: “We recognised that it was becoming a problem meeting our target because of the subsidy and that’s when we set up the group and asked people to come to us. The recommendation was to increase the subsidy by £16,000. That wasn’t about increasing the subsidy to build more houses, that was increasing the subsidy to be able to meet the target we’d set, recognising the difficulties social landlords were telling us about.

“In all tenures of housing, per 100,000 head of population, we’re building more in Scotland than anywhere else in the UK. We’re building more social houses here in Scotland since 2007, than were previously built. We also set up the National Housing Trust which is innovative and which is a first of its kind. It’s very popular and gives people the chance to rent at mid market prices, with the opportunity to buy. I visited a number of tenants in National Housing Trust homes and they’re thrilled to get this chance because they know they can get their foot on the ladder. They can see how they manage to save something by, while paying a rent and looking ahead to maybe eventually buying the property. It’s a great initiative.”

Labour’s housing spokeswoman MSP Mary Fee believes there is a “crisis” in the housing sector. She said: “If we look at completions and new builds, if you look at the pressures on local authorities and housing associations, there is a huge housing crisis. Completions are at the lowest number for many years and there’s been a cut to the housing budget.

“There are a number of things Labour would like to do within the housing portfolio. In my view and in Labour’s view, housing should stand at the core of your policies because of the impact it has on health and wellbeing. One of the things we would like to do is to have a 10 year action plan which would really reinvigorate the whole sector. Since I took over the housing portfolio I have contacted a number of local authorities, housing associations, construction companies and other organisations to get a view of what they think we can do to help them. I’m keen to set up housing summits in Glasgow, Edinburgh and possibly Aberdeen to bring together groups to sit down so we can say to them ‘what can we do to help you achieve what you want’.

“There’s also a modal shift going on to get people out of their cars and get them out walking and cycling. We need to work with builders and construction companies when developments are in their initial planning stages and see how they can help to encourage people to start walking on safe walking and cycling routes. It is about joining up all the organisations and processes in planning to ensure we’re building sustainable environments.”

The Housing (Scotland) Bill is intended to improve the quality of rented accommodation and will also end right to buy. Introduced to Holyrood in November, the measures in the Bill are intended to enhance housing conditions, retain social housing for the people of Scotland and safeguard social and private tenants. The Bill will end right to buy in Scotland, which will prevent the sale of up to 15,500 social houses over the next 10 years, helping to build more cohesive and sustainable communities. It will also establish a private rented sector tribunal which will provide tenants and landlords with access to specialist justice to resolve disputes more effectively and introduce a regulatory framework for letting agents to help improve overall levels of service and professionalism within the industry. It is also designed to enhance local authority powers to improve the quality of houses in the private sector and increase flexibility in the allocation and management of social housing.

The Scottish Federation of Housing Associations (SFHA) has long campaigned for an end to right to buy. Andy Young, policy and membership manager at SFHA said: “While the SFHA broadly welcomes many aspects of the Bill, we are keen to examine the finer detail of some of the inclusions. We commend the Scottish Government for ending the right to buy in Scotland, though we are unclear as to why it has put in place a notice period of three years when 73 per cent of responses to its consultation on the matter suggested a shorter period. We will put forward a case to reduce this period.

“Any flexibility around allocations and a better use of the social housing stock is to be welcomed, while the devil will be in the detail of many of the proposals aimed at tackling antisocial behaviour. Our view is that these measures will not succeed without a multi-agency approach. Whilst we recognise the need for the Scottish Housing Regulator to act quickly in the rare case of imminent landlord insolvency, the circumstances in which a landlord’s assets can be transferred to another landlord without consulting tenants or requiring a valuation must be very carefully and tightly defined.”

Speaking about the private rented sector, Burgess added: “We now have a private rented sector strategy. We recognise that housing is not just one type, we need all tenures of housing to have a good functioning housing system. Since devolution, this is the first private rented sector strategy which has been developed. The Housing (Scotland) Bill is going to add to that and take it forward.

“We are recognising that the private [rented] sector is there but we need to increase people’s confidence and build on that. In many countries, renting in the private sector outstrips house ownership. We recognise the private sector has a role but we also believe that in Scotland, we don’t have landlords with thousands of houses, what we have is someone who has inherited a house or was unable to sell a house and finds themselves a private landlord without knowing all that goes with it. It is about raising standards and ensuring tenants are aware of their rights in the private sector. Well informed tenants can drive improvement.”

UK Government welfare reforms have caused serious issues for housing in Scotland. The spare room subsidy, or bedroom tax, has meant since April, working age social tenants deemed to have too many rooms have had benefit payments cut. Problems have arisen about there not being enough smaller homes for people to move into and tenants falling into arrears. However, two weeks ago, the Scottish Government’s budget, which includes additional funding to mitigate the bedroom tax, secured the backing of the parliament by 108 votes to 15.

Finance Secretary John Swinney said the DWP should now listen to the will of the Scottish Parliament and lift the cap on direct payments to people affected by the so-called tax. During his speech to parliament, Swinney announced the Scottish Government will increase the money available through discretionary housing payments (DHP) to the limit imposed by the DWP – £22.85m. If the DWP refuse the request to lift the cap on DHPs, the government will make a further £12m available to social landlords to prevent evictions solely due to the bedroom tax.

Swinney said: “Parliament has agreed that discretionary housing payments are the best way to make payments. It is time for Lord Freud to listen and to respond positively to the will of the Scottish Parliament. Westminster must listen and respect the will of the Scottish Parliament.

“If the UK Government refuses the Scottish Government’s request we will put in place a scheme to make the money available to social landlords to prevent evictions as a result of the bedroom tax but we will not be able to make that money available directly to individuals. It is ridiculous that this Government must pick up the pieces of Westminster’s policies and as a consequence, divert funding from devolved policies.”

Gordon MacRae, head of communications and policy at Shelter Scotland, said the bedroom tax not only makes it harder for sick and low income households to pay their rent – forcing thousands into debt or out of their home -  but it also poisons the very fabric of Scotland’s social housing system.

He added: “Councils and housing associations have to divert resources away from investing in the local community and into dealing with increased rent arrears and an unsustainable demand for one-bedroom properties that do not exist. At Shelter Scotland we believe the priority remains to get money into people’s hands to help them pay their rent. We were delighted that the Scottish Government listened to our call to top up the discretionary housing payments and we welcome today’s announcement of a further £15 million if agreement can be reached with the Department for Work and Pensions to protect tenants’ current levels of benefit.”

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