Housing shortages limit our economic growth and social ambition

Having a place to call home is something we all aspire to. Yet in recent years we’ve seen a national housing emergency declared in Scotland reflecting the challenges we are facing in meeting all our housing needs.

Prosper (SCDI) is an apolitical, not-for-profit membership organisation and think tank. Over the past 12 months our members across Scotland and our regional committees have been highlighting their concerns about future investment plans at risk of being constrained by a lack of appropriate housing either being built or in the future pipeline.

We are also seeing a rapid expansion of economic opportunity which in some parts of Scotland is at a scale not seen for decades. For example, the housing associated with the expansion of investment in clean power, in the Inner Moray Firth, is unlikely to be met from existing planned developments and stock. Ensuring we are ready to deliver new housing to meet housing needs at an accelerated pace has become an economic as well as a social imperative.

To understand why we are not building enough new homes, Prosper initiated its Housing for a Growing Economy report, looking at what barriers exist to a well-functioning housing market across Scotland for all types and tenures and what solutions could unlock new housebuilding, enabling economic growth, jobs and prosperity.

Following a deep dive into the issue with over 100 stakeholders across Scotland and extensive desk research we found that behind the headlines is a complex picture of constraints.

Skills shortages and a supply chain diminished over several years are compounded by uncertainty over planning timelines and costs and the cumulative burden of regulation. In rural places this has meant prohibitively high costs to build. Overlay regulatory uncertainty - a consequence of rent controls and a proposed Housing Bill which has impacted on investor confidence - and there is a sense that the housing market in Scotland is not functioning as well as it should to address the estimated backlog of 100,000 homes needed in Scotland. Stakeholders expressed a frustration that the delivery of housing of all types and tenures is off track despite the intentions of our national housing strategy. They argued greater consistency and ambition is needed from both national and local governments.

Our main recommendations in the report focus on five areas:

• Prioritise the role of housing in driving growth – Scottish Government should set an ambition for 25,000 homes of all tenures to be built each year, setting up an oversight function to drive this, creating stability in housing policy and making supporting housing a greater priority for enterprise and skills agencies.
• Implement ways to unlock rural housing and growth – Local should incentivise SME builders by aggregating housing procurement pipelines and expediting planning for allocated sites in Local Development Plans, alongside adapting rural grant funding to enable more successful applications.
• Create certainty and develop new partnerships to deliver urban homes – Scottish Government should pass the Housing Bill with clarity for the Build to Rent sector, broaden funding options for infrastructure and exploring new partnership model. Investing in and putting affordable housing funding on a three to five year forward cycle would allow RSLs to forward plan and invest in new housing.
• Work with industry to transform and modernise housebuilding – By encouraging the adoption of the Edinburgh Home Demonstrator, incentivising the use of modern methods of construction and pre-manufactured content in affordable housing and encouraging investment in the construction sector as part of broader plans to invest in advanced manufacturing.
• Collaborate to futureproof the workforce – An updated and refreshed analysis of skills demand from new and existing workers is needed, as is collaboration between educators, awarding bodies and industry to improve the responsiveness of standards and the curriculum. This must be supported by meaningful funding from government including flexible funding for employers and capital investment for colleges.

These are practical measures most of which don’t require new funding. Setting a greater intention to remove the barriers to new house building for homes of all types and tenures is a pre-requisite to unlocking growth, in turn enabling us to achieve both our economic and social ambitions for Scotland.

Download the full list of recommendations, executive summary or full report here.

Clare.reid@prosper.scot (https://prosper.scot)