Jane Wood, the Chief Executive of Homes for Scotland, reminded The Business audience that housing — in all its tenures — is fundamental to how we function as a society. Scotland needs to build over 25,000 homes to up its game.
“We know we are in a housing emergency in Scotland. We know we have no real exit strategy for that. We know we have a 100,000 shortfall. And we know there is a significant lack of knowledge and understanding about why we build homes, why we need them, who builds them and how we finance them. I say this across all of the informers in civic society: this is a real concern.”
Homes for Scotland say our nation needs over 25,000 homes and should be building between 25,000 to 30,000 homes per year. Currently, it is under 19,000. Housing covers only 2.8 per cent of Scotland’s total landmass, while building and construction is 8 per cent of the Scottish economy.
The remit of housing currently sits within the ministerial directorates of social justice and communities, rather than in the economy directorate, which would be seen as a better way of driving change. The social, affordable, rented and private housing sectors are all part of the issue facing Scotland’s population and are vital elements of the Scottish Government’s policy objectives in tackling poverty, inequality, growing the economy and dealing with climate change.
“We have lobbied hard as an organisation for housing to become one of Scotland’s national outcomes. If you look at Scotland as a plc, and its 11 national outcomes, housing is now there as one because we felt it was important.”
The Infrastructure Commission for Scotland in 2021 called for the development of ‘place-based’ assessment of long-term housing supply across Scotland, with a coherent labour strategy to support it.
Jane Wood then posed the question: how does an infrastructure plan, published by a Scottish Government, set out clear links for the delivery of housing as core infrastructure, other than announcements they make on key capital funding projects to fund 110,000 affordable homes? If Scotland needs over 25000 homes to up its game.
“For me, my organisation represents home builders and registered social landlords that build 90 per cent of Scotland’s housing. It also represents all of that supply chain with its mortgage brokers, architects, banks, and planners. That supply chain is critical as well and all are concerned, and we have a societal problem.”
Jane Wood referred to the importance of the political landscape and said there has been devastating cuts to the Scottish housing budget; there is also the ending of Bute House Agreement, which has the minority Scottish National Party government in coalition with the Green Party, and a radical change in political priorities after Labour victory in the UK elections in 2024.
“Increasing the housing supply in England is a clear intent and they have been interventionist, which is interesting in regards of planning and delivery. There is an ambition to seed 1.4 million houses in England and Wales. The jury is still out on that. I think the fact that they are mission-led and creating targets is a marked contrast to where we are in Scotland, where we feel there is a lack of impactful action.”
Ms Wood can see there is a lot of good stuff going on, but feels there needs to be more urgency in building more homes – Scotland needs over 25,000 homes to up its game. For Homes for Scotland members, the biggest operational blocker comes back to planning. Currently, there are 20,000 potential homes stalled in the planning process.
“If we go to the root, it comes back to planning. The decision timescale for planning is a big issue for our members. There are down from 62 to 37 weeks, but the statutory timescale is 16 weeks. We know that planning is under-resourced and ill-equipped to deal with the housing emergency as it stands at the moment.”
A FALL IN THE NUMBER OF SME HOMEBUILDERS
She said NPF4, the national policy planning framework, was part of the challenge for Homes for Scotland members. A Competition and Markets Authority investigation into housing building highlighted the Scottish concerns of ‘lack of predictability’, ‘length of cost and complexity’ and ‘insufficient clarity and strength to meet housing needs’.
The clearest data is the starting and completion numbers for homes, which are now falling for a second year.
Ms Wood said the barriers are also around heavy regulation and that homebuilders need long-term certainty which recognise housing as key investment priority. Homes for Scotland maintain regulation, which includes building standards and broadband expectations, puts an extra £34,000 on the cost of a new house in Scotland. This does not include a new building safety levy. This places further burden on margins when there is also a shortage of suitable land.
She is also concerned about the disappearance of SME homebuilders who have been the bedrock of housing developments in Highlands and Island areas. While the large plcs build 60 per cent of homes in Scotland, there are fewer than 300 SME housebuilders in the whole of Scotland. The decline has come about by a lack of finance and a failure of lenders to understand the business model of home-building.
In the follow-on question, Chris Dougray, a director of CBRE Scotland, asked the panel.
“I might respectfully slightly disagree with the view that planning is one of the key blockers. There’s no question that planning drives developers nuts, but what is stopping development is viability. In my view, there is not a large-scale project which stacks up. Until we address how we deal with the infrastructure into those large-scale sites, I don’t believe we will have a ready solution to the housing crisis. I think it’s a housing crisis for our most economically disadvantaged, which makes it all the more serious. This is viability issue is the core of the issue. Until we see public sector intervention in the markets, we will not see large-scale housing to solve our crisis.”
In response, Jane Wood said that the view on planning was from the members, the sector, and also from developers.
“I don’t disagree that viability is a huge issue. I don’t disagree that public sector intervention is needed. I do disagree that the issue of the housing emergency just lies with the most vulnerable in our community.”
She said the housing emergency is being felt across all sectors of society, and not simply the most vulnerable.
Peter Reekie said there are land planning, and infrastructure issues and delivery and construction issues.
“If you want to do really big developments at scale of the New Town type, then you need public intervention in that market place. It’s a big driver. Infrastructure is a system of systems and you need all the bits to coincide on the site to make it developable. Bringing together the datasets, and use of big data around construction, and we are working on that, is so important. Then the planning system will have to get more interventionist on prioritisation, as well as permissioning.”
