Next Scottish Government Needs Housing Refocus

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Scotland needs to build more homes.

A lot more homes in fact, if you believe the recent report from the independent Commission on Housing and Wellbeing.

Last year it recommended that the Scottish housebuilding industry needs to increase its production by almost a third compared with the 17,360 new homes built during 2015.

All of the main political parties in this year’s election were in agreement over how this could be achieved – principally, in their view, through boosting the supply of new affordable homes.

A commendable strategy, given that many first-time buyers in Scotland are still struggling to get a foot on the housing ladder.

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The incumbent party, the SNP, who look set to secure re-election despite losing their overall majority today, have already taken a number of steps they believe will make up this shortfall.

“Will Scotland be able to build the additional homes it so desperately needs?”

Their most positive contribution has been their pragmatic approach to planning, especially in relation to development on the green belt, which far exceeds the current system we see south of the border.

However, during their tenure they have also implemented major changes to Land and Building Transaction Tax, introduced a 3 per cent supplement on second homes, and announced a successor to the Help to Buy scheme, to further push the agenda for more affordable housing.

Big over small?

My concern is that the government-elect risks creating a law of unintended consequences, as these policies aimed at boosting the affordable end of the market are encouraging Scottish housebuilders to focus on the provision of smaller homes over large.

While building a new two-bed home may meet the needs of a single small household or first-time buyer, it will not result in any movement further up the housing ladder.

Yet building a new four-bed home plays a two-fold role: addressing the demands of current overcrowded households who are in need of larger housing and, in turn, meeting the needs of smaller, newly forming households by freeing up smaller housing further down the ladder.

“Scotland really needs is housing policy that is far more balanced in nature”

What will happen in three to five years’ time when the current flurry of first-time buyers turns into growing families who want to upsize but cannot, as housing policies today have stalled the supply of larger family homes for the future?

Where are the skills?

At the same time, the industry is still facing a serious skills shortage, which so far has not been properly addressed.

Will Scotland be able to build the additional homes it so desperately needs if there are not enough bricklayers, carpenters, plumbers and electricians to actually build them?

Having seen the benefits of investing heavily in our own workforce in recent years through our graduate and apprenticeship programmes, I believe a new national programme to promote the opportunities in the construction industry would go a long way towards addressing this skills gap in Scotland.

And while each of the parties are right to think that the undersupply of affordable housing is a problem, what Scotland really needs is housing policy that is far more balanced in nature, which encourages development at all stages of the housing ladder – not just at the bottom end of it.

Alan Brown is the CEO of Cala Group