Anyone who has had a medal finish in their sights knows that success comes from the long-term implementation of training plans, trying things along the way and capitalising on what works, and making incremental improvements to what is tried and true.
So it is encouraging to see that much of what the Scottish Government plans to do in the latest Housing Emergency Action Plan to maximise investment in Scotland's housing sector could be a mixture of the implementation of what's currently working, trying some news things and doing some things again, but with some tweaks to meet specific challenges.
For example:
Delivering up to £4.9 billion of investment over 4 years through a mixture of public and privately leveraged investment
We read this as a nod to the current and successful Affordable Housing Supply Programme, but also to possible further iterations of the successful leveraging of public funding to secure private investment to support the delivery of large-scale delivery. LAR Housing Trust has been incredibly successful in demonstrating what can be delivered here, taking its original £55 million loan from Scottish Government and supplementing that with £65 million of private finance to deliver over 750 homes for mid-market rent. Another successful example of this approach is Highland Housing Alliance securing a multi-million-pound funding arrangement with Scottish Widows and the Scottish Government which secured the tenancies of more than 160 mid-market rental (MMR) properties across the Highlands.
It's clear that this approach can work and can deliver some big unit numbers – supporting and building on the solid foundation provided by the grant funded Affordable Housing Supply Programme. Perhaps the future could see some more examples of this – it's notable that unlike grant funding which is generally not repayable, Scottish Government loans are repaid over time which could create future opportunities for further investment.
Housing will continue to be a key focus for Scottish National Investment Bank
Again, there have already been some gains achieved here, particularly with the Bank's £60 million investment in Thriving Investment's (formerly PFP Capital) Mid-Market Rent Fund (which itself received a £47.5 million loan from Scottish Government which leveraged an additional £175 million private investment), a £3.9 million loan to Srathcarron Homes to support the construction of 25 family homes, and a £730,000 investment in DITT Construction Ltd to support the construction of homes in Lerwick for mid-market rent.
We know that developers are looking for new ways to finance housing development, and it’s encouraging to see that housing will continue to be a focus for the Bank, contributing to tackling the Housing Emergency.
Support the delivery of more homes in Scotland’s rural and island communities by working with public bodies, landowners and the Scottish National Investment Bank to unlock land, build delivery capacity and develop a pipeline of investment opportunities
This is an exciting opportunity to take the sector's combined experiences and by way of incremental improvements deliver a real change of pace.
We know from our engagement with the sector that one of the challenges facing developers (public and private) otherwise keen to deliver housing in rural and island communities is the issue of scale. A focus on creating a pipeline of opportunities within geographical locations will deliver certainty for developers that a development supply chain – once established – will be utilised in a way which is commercially supportable.
Could there be an opportunity to re-purpose previously successful mechanisms which involved partnerships between the public sector and developers supporting developer pipeline certainty to achieve this? The National Housing Trust, launched by Scottish Futures Trust in 2011, succeeded in delivering over 1,700 homes across Scotland and including in rural communities, for mid-market rent via a mechanism which offered developers a guaranteed purchaser of completed units.
Unlock new scale investment opportunities across all tenures by making early decisions on the use of powers sought in the Housing (Scotland) Bill to allow for the exemption of certain properties from the rent control measures in the Bill. In principle, we intend to exempt, where appropriate, Mid-Market Rent and Build to Rent properties, to protect and promote investment in those sectors.
And we can't not mention this helpful statement on exemptions for mid-market rent from rent control measures, which will be helpful to investors considering investments into affordable housing in Scotland. Although on this (as with everything) the devil will be in the detail, and in particular the definition of mid-market rent, it has to be hoped (or anticipated given that Build to Rent properties are also to be excluded, in principle) that this will be drawn on broad enough terms to include mid-market rent homes which are delivered both with and without Affordable Housing Supply Programme funding to maintain private investment into the tenure.
Team Game
Overall, the Housing Emergency Action Plan is an energic and focused read. It concludes with a Call to Action for all partners across the housing sector and beyond to work alongside Scottish Government and take bold coordinated action.
This is well placed as there can be no doubt that tackling the Housing Emergency is a team endeavour, and if every member of the team works to their full capacity with open communication, trust and a clear, shared goal of ensuring that everyone has a safe, good quality and affordable home then we will indeed get further, faster, together.
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Legal Director
