Social housing completions up 10 per cent but sector calls for more

The Scottish Government has surpassed its target of delivering 30,000 affordable homes in this parliamentary term thanks to a 10 per cent increase in the number of social sector homes completed in the past year, new figures have revealed.

Official statistics released yesterday show that 3,879 new homes were delivered during the past 12 months, bringing the tally to 30,133 – 133 more than the target set by the Scottish Government.

From July to September 2015, 895 social sector homes were completed – 23 per cent more than in the same quarter in 2014.

Social rented completions between April 2011 and end October 2015 has totalled at 20,400, exceeding the target by 400 homes, while the number of council house completions has reached 5,292, exceeding the target by 292 homes.

Meanwhile, private sector led completions dropped by 4 per cent in the year to end June 2015, but the figures show there was a rise in private sector led starts between April and June this year, increasing by 7 per cent against the same quarter in 2014. This brings the total for the year to end June 2015 to 12,530 – 550 more homes than in the previous year.

“Housing is a key priority for this government, and these statistics show we have exceeded our target to deliver 30,000 affordable homes,” said Scotland’s housing minister, Margaret Burgess. “I’m pleased to see an increase in the number of social sector homes completed in the past year and that private sector starts are also up on last year’s figures.

“High quality, energy efficient, affordable homes form the cornerstone of socially and economically sustainable communities. We have worked hard with the housing sector to deliver these homes as well as develop innovative funding initiatives, such as government guarantees, loans, grant recycling and new sources of private funding, to help both buyers and developers.”

Philip Hogg
Philip Hogg

Philip Hogg, chief executive of trade body Homes for Scotland, said the figures “are not only disappointing, they are truly shocking and demonstrate the size of the challenge”.

He added: “Unfortunately, there is little in the way of positives that can be taken.

“Not only do we see a fall in the latest yearly figures, the last two consecutive quarters have also shown a drop. There has also been a 22 per cent decrease on Q2 levels compared to last year but it is when you look at the position in 2007, prior to the economic downturn, that you see the true magnitude of the problem with completions down more than half.

“The stop/start nature of Help to Buy funding, which this year ran out in May, is causing both home buyers and builders uncertainty, making it very difficult for the industry to forward plan and maintain any growth momentum. With this situation in marked contrast to the position south of the border, the consequences are reflected not just in today’s statistics but also our own more up-to-date data.

“The unfortunate truth of the matter is that today’s statistics show that the housing pressures facing Scots show no sign of abating. If we are really serious about tackling the housing crisis, we must recognise two fundamental things.

“The first is that any ambition to increase levels of ‘affordable’ housing is welcome but is only a minority part of the picture. Affordable housing delivery is inextricably linked to the building of homes in the private sector, the engine of housing delivery, through the direct contribution the industry makes through planning policy – so if we want to build more affordable housing, we must encourage and facilitate more private sector development.

“The second is that the majority of Scots, as research firmly shows, aspire to own their own home.

“Having an effective and accessible Help to Buy (Scotland) scheme without funding gaps is crucial on both of these counts, as is a balanced housing policy approach which places equal emphasis on having enough homes of all tenures in the right places to meet the diverse housing needs and aspirations of all those living in Scotland.”

Ed Monaghan
Ed Monaghan

Ed Monaghan, chief executive of Mactaggart & Mickel Group, said the new build completion statistics are disappointing considering the sector has been demonstrating signs of confidence of late with more competitive mortgage packages on offer.

He added: “The decline could be attributed to the introduction of the Land and Buildings Transaction Tax discouraging people from investing in top tier properties, which could cause a significant impact on sales.

“The lack of housing incentives such as Help to Buy could be further compounding this issue. This is proving to be a successful driver for the industry south of the border, as demonstrated by the Chancellor’s commitment to build a million homes over the life of the parliament in his Autumn Statement last week.

“It is imperative that we have suitable incentive programmes in Scotland which are supported by the industry and by the Scottish Government in order to return to more positive levels of growth.”

CIH Scotland said the figures show encouraging signs but warned that there is still a long way to go.

Director Annie Mauger said: “We welcome the rise in affordable and social rented homes built over the 12 months to September 2015. However, these figures also show that the total number of homes built across all tenures has fallen in recent years – and the scale of the challenge we face to build the new housing we need to help the growing number of people who are struggling to access a decent home at a price they can afford.

“Our research with Shelter Scotland and the Scottish Federation of Housing Associations has shown that we need to build at least 12,000 affordable homes a year for the next five years – today’s figures show that just under 7,000 were built in the year to the end of September. Given current budget constraints, delivering the number of new homes that are needed will require some genuinely bold new thinking.

“We also need to ensure that we are building homes of all tenures (to buy, to rent and for shared ownership) that are truly affordable for people on all incomes. Ahead of next year’s election, we look forward to working with politicians from all parties to share the knowledge and experience of Scotland’s housing professionals so we can develop solutions that will work in practice on the ground.”

The sentiments were echoed by the Scottish Federation of Housing Associations (SFHA) and Shelter Scotland.

Mary Taylor, SFHA chief executive, said: “We welcome the fact that the Scottish Government has met its target and exceeded it by 133 affordable homes. Housing targets represent more than just an amount of new builds – 30,133 households’ life chances will have been improved by securing a high quality, energy efficient, affordable home.”

Mary Taylor added: “We acknowledge the manifesto pledge by the SNP to invest at least £3 billion to deliver 50,000 affordable homes over the next Parliament if re-elected. However, we are calling on all political parties to commit to the 12,000 target ahead of the Holyrood elections.

“It is vital that our members have the resources to build more affordable homes, and Scottish Ministers are already considering expert recommendations made earlier this summer which showed a need for increased public investment per home to produce social housing at affordable rents – particularly for those on lower incomes – and unlock the private borrowing capacity of housing associations. We are also calling on all political parties ahead of the Holyrood elections to commit to increased investment.

“Not only will investing in housing help to create jobs and boost the economy, but good quality, affordable, energy efficient housing can immeasurably improve people’s health, wellbeing and life chances.”

Graeme Brown, director of Shelter Scotland, said: “We welcome the fact that the Scottish Government has exceeded its own target of 30,000 affordable homes over the last five years. However, we know that we need a real step change in our scale of ambition on affordable housing supply if we are to tackle the urgency and human cost of Scotland’s housing crisis.

“Today’s figures prove that setting a national target for affordable house building can work, now we just need to match the level of ambition to the real level of housing need.”

Graeme Brown added: “It is only by committing to delivering 12,000 affordable homes a year that we can bring hope to the 150,000 families and individuals on waiting lists for a home across Scotland. We want to see all political parties in Scotland make delivering this kind of step change in affordable housing supply a priority in their manifestos for the forthcoming Holyrood elections.”

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