Homes for Scotland

Letter to the Editor: Homes for Scotland clears up ‘anti social housing’ claims

Nicola Barclay

Nicola Barclay

Further to an interview in The Sunday Times in which I emphasised that solving Scotland’s housing crisis required a whole-system all-tenure approach, it appears that some people may have misinterpreted my remarks (indeed some misrepresenting them completely), framing them as being “anti social housing”.

With everything Homes for Scotland does focused on ensuring our growing population has access to a complete range of housing options in order to meet diverse need and aspiration, this is clearly not the case. Indeed, since it was established, Homes for Scotland has consistently highlighted the need to recognise the inter-dependencies between the public and private housing sectors and the importance of achieving a balanced tenure mix (as highlighted in our manifesto for the last Scottish Parliamentary elections).

For the sake of clarity, Homes for Scotland has never said (or implied) that “affordable and social rented house building was actually stymying the development of market housing”.  And we are certainly not attempting to “stymie social housebuilding”.

It is also exasperating to see the myth surrounding land banking being trotted out again. Despite a number of studies, no evidence has ever been found to substantiate claims that this is being used to restrict the supply of homes or housing land. With it simply making no sense for developers to allow land that they have bought to lie idle when the only way of getting a timely return on their investment is to build and sell homes, the main constraints on the use of land for housing are related to obtaining all of the necessary approvals and agreements – a process which is lengthy, complex and unpredictable.

What I was actually highlighting in the body of The Sunday Times story was that focusing on one tenure at the expense of others will not, in itself, solve our housing crisis. The stark reality, whether some people choose to accept it or not, is that the current 50,000 affordable housing target can only be achieved if we also have a healthy private sector – since not only do private home builders make significant direct contributions in this regard, the same issues that affect them (such as the poorly performing planning system, front-funding of infrastructure and education provision) also affect the public sector.

Of course, it is right and proper to have a robust debate on the way forward for housing in Scotland, but please let’s read beyond regrettably-worded headlines and look at the real substance of the matter. Some, however, will never seek to engage positively and constructively. I believe that it is this kind of approach that does those looking for a new home, whatever the circumstances, the most misdeed.

Nicola Barclay

Chief Executive

Homes for Scotland

Homes for Scotland’s anti-social housebuilding agenda ‘out of touch with reality’

construction stockHomes for Scotland’s view that a focus on affordable and social housing is exacerbating Scotland’s housing crisis and fails to grasp the commercial realities of development is “out of touch with reality” and must be “rejected outright” by the Scottish Government, according to a think-tank.

In an interview with The Times, recounted in Scottish Construction Now yesterdayNicola Barclay, chief executive of industry body Homes for Scotland (HFS), said the government’s target of delivering 50,000 affordable homes by the end of this parliamentary session is damaging private sector growth and would not solve the current housing crisis.

However, Ben Wray, head of policy at Common Weal, has argued that this “anti-social” view is lobbying for the very property developer model which caused the housing crisis.

Mr Wray said: “When even Conservative minister’s in the UK government are saying that to solve the housing crisis we need to borrow more to build social housing, Homes for Scotland’s attempt to stymie social housebuilding in Scotland appear totally out of touch with reality.

“Since Homes for Scotland offer no clear policy solutions, it can only be assumed that this attack on social housebuilding is aggressive lobbying to extract yet more subsidies for private developers. Considering (earlier this month) the Scottish Government announced a new subsidy for private sector build-to-rent housing in partnership Homes for Scotland – on top of the huge subsidy they already get through housing benefit – it is quite remarkable that they are back for more so soon after.

“Any attempt to further privatise the housing market must be rejected outright by the Scottish Government. Not only is the dominance of the profit-motive in housing the major force behind the financial crisis in 2008, it is also the very reason why more affordable housing is not being built by the private sector, as rising property prices and land values make it more profitable to sit on land than to build on it. ONS data shows average house prices in Scotland hit their highest level ever in September 2017, rising above the previous pre-recession peak.

“The property developer model is what created the housing crisis – it would be madness to believe it can solve it as well.”

Adam Lang, head of communications and policy at Shelter Scotland, said he “couldn’t disagree more” that a move away from focus on social housing will help resolve the problems facing the sector.

He tweeted: “It is only a focus on affordable & social housing that will genuinely release the pressure on our housing system.

“It is exactly because we have not focussed enough on social house building in recent years that we are in a housing crisis.”

Social housing focus ‘will not solve Scotland’s housing crisis’

Nicola Barclay

Nicola Barclay

The Scottish Government’s “political focus” on affordable and social housing is exacerbating Scotland’s housing crisis and fails to grasp the commercial realities of development, according to Scotland’s house builders.

In an interview with The Times, Nicola Barclay, chief executive of industry body Homes for Scotland (HFS), said the government’s target of delivering 50,000 affordable homes by the end of this parliamentary session is damaging private sector growth and would not solve the current housing crisis.

Ms Barclay added increasing the number of homes being built required a better understanding from Holyrood of the commercial realities of development as well as the help of the private sector.

She told The Times: “The government must work in partnership with the private sector but it seems reluctant to acknowledge the importance of home builders in solving the housing crisis or the urgency with which we need action if it is to become easier, rather than increasingly difficult, to open new sites.

“It requires a cultural change in the way politicians, local authorities and communities view development.”

Ms Barclay added: “Three-quarters of Scots want to own their own home but there is no national target for the private sector, which accounts for the biggest proportion of housing output and significantly contributes to the provision of affordable housing through planning policy. If the target for affordable homes is to be met, the Scottish Government must broaden its focus and adopt a whole-system approach that recognises the importance of all tenures.”

Planning performance figures for 2016/17, published earlier this year, revealed that the average decision time for major housing developments was 44.9 weeks for 2016/17, more than four weeks slower than the previous year (40.6 weeks) and almost three times the statutory period of 16 weeks.

And just last month, HFS urged the Scottish Government to guard against complacency as new statistics showed a marginal increase of just 251 homes (1%) completed in 2016-17 compared to the previous year.

Ms Barclay said: “We are still building 36% less homes than pre-recession levels. Housing output is flatlining, with the most recent official figures showing a total of only 16,498 homes built in 2016, just 88 more, or 1%, than in the year before. With our population at a record high, that’s bad news for those looking for a new home, particularly young people and growing families.”

Dismissing the criticism, housing minister Kevin Stewart, said: “Our changes to the planning system aim to strengthen the role of planning in delivering housing and infrastructure and continue to support the industry and local authorities to deliver their housing priorities with quality homes in mixed communities that fit local needs.

“The rate of house-building completions across all sectors puts Scotland ahead of England and Wales and we outperform the whole of the UK in new-build social sector completion rates. In fact, we have built 41,000 more homes than would have been built at England’s slower per-capita rate.”

New income guarantee scheme launched to boost investment in housing

Edinburgh Fountainbridge build to rent

A Build to Rent scheme being delivered in Fountainbridge, Edinburgh

Housing minister Kevin Stewart has announced the launch of the UK’s first Rental Income Guarantee Scheme (RIGS) to support investment in private rented housing.

Developed in consultation with the sector, the scheme aims to reduce some of the risk that investors see in the emerging Build to Rent market, with potential to attract £0.5 billion of investment and support delivery of around 2,500 new, high quality private rented homes.

RIGS guarantees 50% of any gap between actual and projected rental income of a development which will provide greater certainty of rental income to investors and landlords during the initial years of letting.

Mr Stewart said: “RIGS is a unique scheme, which will boost this emerging sector. As the first of its kind in the UK, the Scottish Government is clearly demonstrating our commitment to the private housing sector.

“This scheme will help deliver new, high quality private rented homes for tenants, which are modern, energy efficient and professionally managed. And it does so in a way that provides assurances for investors, while ensuring good commercial practice and the incentive for investors to let these homes.

“RIGS is just one part of our More Homes approach to increase housing across all tenures. It can deliver potential investment of £0.5 billion, building 2,500 new homes, along with wider economic benefits. And it clearly shows that Scotland is open for business.”

Nicola Barclay, chief executive of Homes for Scotland, which led a Scottish Government commissioned project on how to expand the Build to Rent sector, said: “The announcement of the Rental Income Guarantee Scheme will provide investors with greater confidence during the early stages of development, when letting risk is likely to be highest and is just one of the levers the Scottish Government has put in place to help boost a tenure which has such an important part to play in meeting the diverse housing needs of our growing population.

“As well as the significant investment and development opportunities on offer, expanding build-to-rent will help increase choice, flexibility and affordability for tenants.  Most importantly, perhaps, it also has the ability to transform customer experience of the private rented sector through the delivery of new high-quality, purpose-built and professionally-managed accommodation.”

Barry White, chief executive of the Scottish Futures Trust who will manage the scheme, said: “The launch of RIGS has sent out a clear message which demonstrates Scottish Government’s commitment to the Build to Rent sector as an important way to deliver much-needed quality housing.”

Homes for Scotland appoints Ken Gillespie as chair

Ken Gillespie

Ken Gillespie

Homes for Scotland has today announced the appointment of Ken Gillespie as chair on a three year term with immediate effect.

A key figure in the UK construction and home building industries with over 33 years’ experience, Gillespie has been responsible for the development and delivery of residential, commercial and infrastructure schemes both nationally and overseas.

Most recently he was chief operating officer of FTSE 250 company Galliford Try where he oversaw revenues of more than £2 billion before he stood down from the Board in 2016.

Homes for Scotland chief executive, Nicola Barclay, said: “This is a significant appointment for us. Ken’s work consulting with a wide range of stakeholders, together with his knowledge and understanding of what is required to deliver complex projects (such as the Queensferry Crossing) within our communities, brings a new dimension and perspective to our organisation.

“Very much a facilitator and solutions-focused, his expertise will guide us forward as we look to increase our collaboration with those who can generate the change that is required to support the building of more homes, including government at all levels.”

Gillespie takes the reins at a time when housing completion levels remain 36% down on pre-recession levels and members tell HFS that it has never been harder to open new sites and get much needed new homes out of the ground.

Considering the scale of the task ahead given the numerous challenges that must be overcome if the country’s housing crisis is to be resolved, he said: “Having worked in the construction and home building sectors my whole life, I am delighted to represent an industry which is absolutely vital to the social and economic wellbeing of the people of Scotland.

“My philosophy is clear: whether public or private sector, local or national government, we all need to work together, positively and progressively, to an agreed common objective which should be increasing and accelerating housing supply across Scotland to meet the needs of our growing population.”

Builders warn of housing activity slowdown ‘unless LBTT band is extended’

construction stockScotland’s home building industry is warning ministers of a drop in future housing market activity unless the Land and Buildings Transaction Tax (LBTT) band is extended.

Homes for Scotland (HFS) repeated its call for the extension of the current 5% band in order to address the ‘considerable drop’ in activity at the higher end of the property ladder as new figures revealed Revenue Scotland collected £55 million less than expected in receipts from LBTT.

The trade body said the drop has occurred as buyers either can’t afford it or consider the ‘perceived punitive nature’ of the tax and choose to stay put.

Nicola Barclay, chief executive of HFS, said feedback from its members “shows that the present system (which varies considerably from that south of the border) is creating significant barriers”.

“As we have expressed in submissions to the Scottish Government and Scottish Parliament, if we are to have a healthy and well-functioning housing market, we need a tax framework that enables movement up and down all price levels,” she said.

“Whilst in volume terms this may currently impact only a relatively small number of customers, the concern must be that, if aspirational buyers are unable or indeed choose not to move, this will create blockages lower down and place more pressure on the price of the fewer homes that do come on the market.

“Not only will this distort the market, it will also ultimately exacerbate the housing crisis. Clearly, this is not good news for the three quarters of Scots who wish to own their own home and will also only serve to put further pressure on the social and private rented sectors.

“Crucially, however, as we see from today’s Revenue Scotland report, LBTT also has a massive impact on the Budget and public finances. If the Scottish Government acts to boost activity at the higher end of the market, we believe it would result in a greater tax take than is being achieved at present.”

Analysis of the figures by the Scottish Property Federation (SPF), show that Scottish Government’s residential property revenue returned to pre-LBTT levels last month though commercial property tax revenue was critically low.

Revenues rose in August by £5.2m on July, to £52.8m. This was a jump of £11.6m on the same month in 2016, making it one of the highest total monthly revenues generated from LBTT since the tax came into effect in April 2015.

Residential revenue rose to £28.5m with the second homes tax, the additional dwelling supplement, bringing in £12.1m.  If sustained, residential revenue for 2017 (not including the second homes tax) will surpass the £270m of residential revenue raised in the last year of SDLT for the first time since LBTT was introduced).

This improved revenue is a result of a recovery to pre-LBTT levels of sales of residential properties above £325,000, and a further rise in revenue from the Additional Dwellings Supplement ‘second homes’ tax.

LBTT revenue from commercial property sales rose for the first time in five months, standing at £12.5m.  However, 2017/18 remains a poor year for commercial LBTT (£65.4m) as the total value of LBTT still lags behind 2016/17 (£67.7m) and 2015/16 (£71m).

David Melhuish, director of the Scottish Property Federation, said: “The Scottish Government will be pleased to see that over the summer tax revenues from higher value residential sales have returned to pre-LBTT levels. When added to the windfall generated by the second homes tax (ADS), it is clear the government will expect to reach its 2017-18 LBTT revenue targets, even if weighed down by below-par commercial LBTT figures.

“However, crucially, leading agents are reporting a significant fall in higher value properties coming to market – reducing economic activity and adding pressure on house prices.

“We strongly believe that if the 10% residential threshold in Scotland is raised from £325,000 to £500,000 we would see more tax transactions, which could further boost to both government revenues and market activity.

“Whilst the residential figures are showing signs of improvement, the SPF remains concerned that Scotland’s commercial property market sector continues to show low levels of transactions, particularly for investments above £5m.  This is now affecting government revenues with commercial LBTT set to significantly under-shoot its forecasts for the second year running.”

A link to the SPF’s full report can be found here.

Builders urge Scottish Government to guard against housing complacency

Nicola Barclay

Nicola Barclay

Scotland’s home building industry is urging the Scottish Government to guard against complacency over housing as new statistics show a marginal increase of just 251 homes (1%) completed in 2016-17 compared to the year previous.

The latest annual housing supply statistics, which were published earlier this week, revealed that over 10,600 homes were approved over the year to June, while the number of new builds starts, across the public and private sector, rose by 4% from 17,765 to 18,391, the fourth consecutive annual increase and the highest annual number of starts since 2008-9.

However trade body Homes for Scotland has warned that the increase threatens to downplay “serious systemic issues” contributing to the supply of housing.

Chief executive Nicola Barclay said: “Given the chronic undersupply of housing in Scotland, any form of increase is obviously welcome but closer scrutiny of the figures shows serious systemic issues which appear to be being downplayed.

“The fact of the matter is that an additional 251 new homes doesn’t even begin to address the scale of Scotland’s housing crisis, and whilst affordable housing starts might be up, private sector numbers are down by nine per cent at their lowest level in three years. This is extremely worrying, not just in terms of its impact on the majority of Scots who aspire to own their homes but also in terms of the consequences for jobs, investment and economic growth.

“Unless there is a considered look at the big picture, the inter-dependences between sectors fully recognised and a whole system approach adopted, there must be serious doubt about the achievability of any party’s housing targets.

“The housing minister states that he stands ready to discuss solutions to stimulate private sector growth. These latest figures underline that now is the time for action if we are to safeguard our country’s social well-being and future prosperity.”

Yesterday housing and homelessness charity Shelter Scotland highlighted concerns it has regarding the number of home completions as well as an increase in social tenant evictions.

Scottish National Investment Bank to take ‘new approach’ on capital investment

Benny Higgins

Benny Higgins

A Scottish National Investment Bank will be established to take a “new approach” on capital investment, the First Minister Nicola Sturgeon announced yesterday.

Tesco Bank CEO Benny Higgins has been appointed to develop the Bank’s remit.

The commitment, which is part of the Programme for Government 2017-18, has been informed in part by advice from the Council of Economic Advisers (CEA) which highlighted the important role National Investment Banks play in providing long term investment to support economic growth in many European countries.

Ms Sturgeon told MSPs: “A significant constraint faced by many businesses with growth potential is access to long term, patient capital.

“I can therefore announce today that we will begin work to establish a Scottish National Investment Bank.

“Benny Higgins, CEO of Tesco Bank has agreed to lead work on developing the Bank’s precise remit, governance, operating model and approach to managing financial risk.

“The Scottish Government has already taken steps to improve access to finance through, for example, the establishment of the Scottish Growth Scheme. However, if we are to succeed in raising our ambition, this is a challenge we must do more to address.

“We believe that the time is now right to take a new approach on capital investment.”

Mr Higgins joined Tesco Bank in 2008 when the supermarket giant bought out Royal Bank of Scotland’s 50% stake in what was a joint venture.

He said: “It is a privilege to be asked by the First Minister and the Scottish Government to lead the work on creating the Scottish National Investment Bank. It is vital that Scotland puts in place the right structure to develop long-term, sustainable growth for all aspects of the economy.”

Elsewhere in the Programme for Government, a Planning Bill will include measures for a “simpler, more effective” system of development plans so it is clearer how areas will develop in the future.

The Scottish Government said that communities would have better opportunities to influence the future of their areas as a result of the bill.

A new Land and Buildings Transaction Tax Bill will make changes to the laws around second homes and allow Additional Dwelling Supplements to be retrospectively reclaimed in some circumstances.

A new £60m Innovation Fund will also be made available to accelerate innovation in new technologies, including low carbon energy infrastructure by 2020.

On housing, the Scottish Government plans to double its funding to the Scottish Empty Homes Partnership and an upcoming Warm Homes Bill will set a new statutory fuel poverty target.

New energy efficiency standards for the private rented sector will also be introduced to improve the quality of housing and help lower fuel bills, particularly for young people, who rely on privately rented accommodation.

It will also consult on permitting the conversion of farm building to form new homes to increase rural housing stock.

Homes for Scotland and RICS Scotland both gave a “cautious welcome” to the proposals.

Homes for Scotland chief executive, Nicola Barclay, said: “With the number of new homes being built in Scotland flatlining, tackling our country’s housing crisis requires a broad approach that includes all market segments. The private sector has a huge role to play by not only helping to meet the aspiration of Scots to own their own home but also in relieving pressure on social housing.

“Key to the Scottish Government’s objectives will be its delivery of an effective planning system and the provision of the infrastructure that is needed to support development. We therefore cautiously welcome the announcement of a Scottish Investment Bank, however will need to see the detail on how it can facilitate this provision.

“By providing a policy framework that supports housing delivery, the Scottish Government can reap the benefits of the significant economic contribution and job creation opportunities home building can offer.”

Gail Hunter, RICS director in Scotland, said: “There are many welcome aspects to this programme but, as ever, the devil will be in the detail when the Bills are presented.

“On this basis, RICS cautiously welcomes proposals to establish a Scottish National Investment Bank to support economic growth, diversification of housing delivery through self-build; and modernising Compulsory Purchase Orders.

“We also support the Scottish Government’s aim to introduce some of the recommendations from the Barclay review, such as the move to three-yearly revaluations from 2022 with valuations based on market conditions on a date one year prior and the increased support town centres will gain by expanding Fresh Start Relief.

“RICS will be undertaking an assessment of the recommendations next week and will look to inform Mr Mackay which recommendations will work, need adjusting before implementation, and which measures need further consideration.

“We also look forward to the highly-anticipated Planning Bill, which we hope will recognise and enhance the quality of Scotland’s planning system.”

Hew Edgar, RICS policy manager for Scotland, added: “The proposal of an LBTT bill is, unfortunately, a missed opportunity as the Scottish Government could fully assess the impact that the current tax bands are having on market fluidity.

“The current rates and bands for LBTT help first-time buyers take that first step onto the housing ladder, and this is a good outcome. However, as owners look to move up the ladder, they are faced with ever-increasing tax liabilities that are deterring them from moving. This is creating a slowdown on interest, resulting in an ‘improve, don’t move’ mindset which is stifling activity in the middle to upper end.

“Meanwhile, we have seen that the prime and subprime markets are struggling with the regime and the effect the current bands are having. Without a proper reassessment of the bands and thresholds, the lower end of the market could see an increase in activity – but with supply outstripping demand, that will only serve to increase house prices.

“RICS urges the Scottish Government to assess the current framework, and consider a range of exemptions and use this tax to encourage activity. These exemptions could include those downsizing and those purchasing regenerated empty properties, of which there are 34,000. “We would welcome the opportunity to discuss such proposals with the Scottish Government.”

Homes for Scotland boss named CEO of the Year at Scottish Women’s Awards

Nicola Barclay with her award

Nicola Barclay with her award

The boss of trade body Homes for Scotland (HFS), Nicola Barclay, won CEO of the Year at the inaugural Scottish Women’s Awards in Glasgow on Wednesday night.

Approaching her second year in post as chief executive, Nicola is focused on addressing Scotland’s housing crisis by creating the conditions that are necessary for increasing the delivery of new homes.

With direct responsibility for managing the HFS secretariat, delivering business strategy and meeting the wide-ranging needs of some 200 member companies, she said: “I am absolutely delighted to have been recognised by the Scottish Women’s Awards. As a female leader in what is still very much a male-dominated industry, it is essential other women, particularly those of the younger generation, know that they can achieve in any field they choose.

“However, it remains a juggling act for many of us and that is why it is so important that we support each other and create the platform for even more brilliant women to shine.”

Previously principal planning advisor and director of planning at HFS before becoming chief executive, Nicola’s 20 years’ experience also includes periods working with Scottish Futures Trust as well as a number of HFS member companies.

A Chartered Member of the Royal Town Planning Institute, Nicola is a graduate of Heriot-Watt University and an active member of Women in Property. She also currently sits on the Scottish Government’s Financial Innovation Advisory and Joint Housing Policy & Delivery Groups, the CITB Scotland Committee, NHBC Scottish committee and the Consumer Code for Home Builders’ Board.

In addition, Nicola has formed a charity partnership between HFS and Habitat for Humanity Great Britain, travelling to India in January 2017 to work on a build for a family within a rural tribal community – an experience she says will stay with her forever.

Home builders bemoan ‘distinct lack of detail’ in planning review proposals

Nicola Barclay

Nicola Barclay

Proposed changes to Scotland’s planning system will be a missed opportunity to make the strategic and radical changes to the delivery model that are required to increase the number of homes across the country, according to Homes for Scotland (HFS).

Submitting its response on behalf of its 200 members to the “Places, People and Planning” position statement, which sets out the package of reform measures the Scottish Government is considering taking forward, the trade body said the proposals fall short of the review’s original objective.

Chief executive Nicola Barclay said: “Given the crucial role the planning system plays in Scotland’s social wellbeing and economic success, the position statement offers a distinct overall lack of detail, particularly in relation to the process for the new Local Development Plan gatecheck and the introduction of an infrastructure levy to address what is becoming the most significant challenge to housing delivery.

“With matters now moving to a Bill at the end of the year, it is our view that a great deal more information is required before the package of legislative and non-legislative reforms can be effectively scrutinised. To that end, HFS and its members remain ready to positively engage and assist in developing a clear, robust and effective set of the proposals that meet the housing needs of our growing population.”

Earlier this week, the Scottish Federation of Housing Associations (SFHA) warned that the new Planning Bill proposals do not focus enough on delivering more quality affordable homes, while the Royal Town Planning Institute in Scotland (RTPI Scotland) urged the Scottish Government to look beyond “merely procedural” change to the planning system, and to provide more detail on how proposals are to be taken forward.