Scottish Futures Trust positions housing as key economic infrastructure
The Scottish Futures Trust (SFT) is calling on the housing industry and Scotland’s councils to work together to further increase housing supply.
Publishing its 2016/17 Annual Business Review outlining where its work has secured £138 million of benefits and savings, SFT chief executive, Barry White, said while housing is often thought of as a social good but in a service-led economy with increasing demand and changing regional demographics, it is now a vital element in securing future economic growth.
Building houses to sell along with grant aided social housing have traditionally been the biggest elements of housing supply, and it is vital that the great activity in those sectors accelerates.
SFT has been a pioneer of a third element – affordable housing. It has secured £400m of additional investment into Scotland’s housing sector with contracts signed to build 2,700 affordable-rent homes through a range of innovative approaches. These modern, energy efficient homes are targeted at households with modest incomes, for whom housing costs would otherwise take up a very high proportion of their monthly budget.
SFT is developing further “public partnerships” to boost housing investment to over £650m and has argued that given the low cost of local authority borrowing, there is the potential to do much more without any grant subsidy.
A further new opportunity to help increase housing supply is through attracting large scale “Build to Rent” (BTR) investment. Already well established in the US and much of Europe, BTR is now fast developing as a new route to supply housing in the UK.
It is estimated that £50 billion of finance, much of it international and pension fund money, has been allocated to the BTR sector in the UK, and Scotland must fight its corner to attract its share of this significant investment. This sector brings faster development than homes for sale as well as a professional landlord with a long time-horizon of managing homes for a range of people from globally mobile millennials keen to locate in Scotland to families living in the rented sector.
To encourage BTR investment in Scotland, SFT manages the Rental Income Guarantee Scheme (RIGS) recently launched by the Scottish Government. RIGS, together with recently issued advice on planning, puts Scotland in a great position to attract significant investment into new housing supply. Scotland’s local authorities have a key role to play in embracing this new approach to providing homes.
Barry White, SFT’s chief executive, said: “Increasing housing supply is a vital element of helping an economy grow and to keep house prices and rents at stable levels. With the lowest local authority borrowing rates to be seen for many years and the wall of money behind the BTR sector, there’s never been a better time to build.
“Having already worked very closely with local authorities on housing to secure £400m of housing investment, there is now a great opportunity to increase that partnership to build more homes, of all tenures across the country, to ensure Scotland attracts and retains more great people to grow our economy.”
Increasing the supply of much-needed housing is just one of many programmes managed by SFT. In delivering these programme, SFT’s work secures substantial savings and benefits and since becoming operational in 2009, the total estimated value of benefits and savings delivered by the company has topped £1bn.
SFT’s work also generates significant economic benefits which includes attracting increased levels of private sector investment, improving energy efficiency across the public sector and establishing super-fast broadband in rural areas.
Some of SFT’s key achievements in addition to the £400m of investment secured for affordable housing, include:
Barry White added: “In securing £138m of savings and benefits over the past 12 months and over £1bn since becoming operational in 2009, SFT has made a huge difference to the infrastructure landscape of Scotland and I extend our congratulations to the many public and private sector partners with whom we work in securing this success.
“Working with others to unlock public sector land to build much-needed housing, or by rolling out our innovative Growth Accelerator programme to attract multi-million-pound levels of economic investment are just two of many examples where our expertise has been put to best use to make a real difference to communities and Scotland’s economy.”
Martin Perry, project director, Edinburgh St James, said: “SFT’s bold and innovative work in devising the Growth Accelerator Model agreement, coupled with the City of Edinburgh Council’s vision for the city, has paved the way for us to invest £1bn into Edinburgh, at Edinburgh St James.
“The scheme is one of the largest and most significant regeneration projects currently underway in the UK and will transform Edinburgh’s east end into an inspiring, attractive and vibrant destination for people to live, shop, experience and play.
“Upon completion in 2020, Edinburgh St James will provide long-term benefits to Edinburgh for generations to come, pushing the city six places up the UK retail rankings to eighth place and delivering over 3,000 permanent full-time jobs in a variety of sectors.”
Speaking of Sanctuary Group’s purchase of the Victoria Hospital site in Glasgow, the sale of which was managed by SFT, Peter Martin, Sanctuary’s Group director – development, said: “We were very impressed at the speed in which SFT brought the vacant Victoria Hospital to market.
“The process facilitated by SFT has enabled Sanctuary to work with the local community to create the planning application being considered by Glasgow City Council.”