Scotland is facing a housing crisis. The country has a rapidly expanding population — one report suggested that there could be as many as 200,000 households across the country by 2020. To meet this demand, the Scottish Government set a target of building up to 20,000 extra homes a year. But over the past five years of the credit crunch, the construction industry’s all but collapsed. A few weeks ago, official figures confirmed that house building was at its lowest since the Second World War. There’s a clear need for imaginative solutions.
Deputy First Minister Nicola Sturgeon
Two years ago, the then Scottish Housing minister, Alex Neil, admitted that the Government in Edinburgh faced “major challenges stemming from the credit crunch and the savage cuts inflicted by the UK Government. Scotland needs many more new houses,” he said, “and to significantly enhance the quality and sustainability of our existing housing stock.”
The evidence to date is that it hasn’t happened. There have been changes in policy. Last week’s announcement about the abolition of the right to buy in Scotland is part of that. The Deputy First Minister, Nicola Sturgeon, claimed that thousands of people would benefit from improved access to social housing as a result. It’s thought that up to 15,000 social houses will be protected from sale over the coming decade.
Now, the private sector is taking matters into its own hands. The industry body, Homes for Scotland, has announced the appointment of experts in housing finance from the world renowned Cambridge Centre for Housing & Planning Research and LSE London to assist a sector-led group to identify and attract new sources of investment to help expand Scotland’s rental sector.
Philip Hogg
Homes for Scotland
The expert project team, which will include support from the Scottish Government, Scottish Development International and Construction Scotland, believes that targeting pension funds and other institutions could help deliver new, high quality, sustainable homes at significant scale, protecting jobs and stimulating activity in the home building sector.
Homes for Scotland Chief Executive, Philip Hogg, argued that “The rental sector has a key role to play in meeting Scotland’s diverse housing needs but, given continuing economic constraints, we need to look at ways we can attract additional finance to help increase housing investment. To do this effectively, we first need to fully understand the needs of investors and develop an approach that will attract them to the Scottish residential market. This is what the team from the Cambridge Centre for Housing & Planning Research and LSE London will be assisting us with.”
The two institutions regard the challenge set for them will be tough.
The Right to Buy social housing like these has been abolished
As Professor Peter Williams of the Cambridge Centre for Housing & Planning Research stressed, “Institutional investment is an issue of great importance and this research will help to clarify the opportunities available to encourage significant, sustainable investment in Scotland’s rental sector.” His colleague, Professor Christine Whitehead from LSE London, added that “whilst it has proved challenging to get institutional involvement in the past we are encouraged by the prospect of a changing environment in which to develop and grow this vital sector.”
The project’s been welcomed by Nicola Sturgeon. “This industry-led project will look at ways to attract additional finance into the house-building sector,” she said, “by targeting pension funds and other institutions. Through identifying and seeking to overcome barriers to securing this investment the project has the potential to unlock millions of pounds of new finance, support jobs and boost the supply of new, high quality rented homes across Scotland.”