By THE time you read this, Jim Preston – this year’s chairman of housebuilding trade body Homes For Scotland (HfS) – will have moved into his new home.
His dream pad is self-build in Dunblane, one of the speciality building services offered by Veitchi, the group he runs for his day job.
But, even though his 28-year career has been dedicated to constructing houses, he admits that building his own home wasn’t easy. The problem was not finding the site or deciding what he wanted to build, it was the funding.
Evidence for this problem was provided in the latest broadside against lenders, published by the Parliamentary Commission on Banking Standards. The plight of those who prefer to build their own home – a particular issue in the Scottish Highlands – was highlighted.
The commission’s report included a case study that showed the detrimental impact on Highland communities in the wake of the banking crisis.
The resulting collapse in bank finance for self-build houses will have “severe” impact on the health of small towns and villages, the report warned. Prior to 2007, there were about 650 self-builds completed every year, but this has dropped “substantially”, according to testimony from the Highlands Small Communities Housing Trust to MP Andrew Tyrie and his colleagues at the commission.
“Funding was difficult,” admits Preston. “The lender I was with stopped doing self-build by the time I was ready; I moved banks. Unfortunately there’s not enough of them doing it, so rates are high. But I’m moving from a house the developer thought I would like to a house I do like.”
He notes that Scotland misses the competition there once was among building societies. Sector consolidation was at its most dramatic when the Dunfermline Building Society – once Scotland’s biggest – had to be rescued in a takeover by its former rival Nationwide in 2009.
His stint as chairman of HfS lasts one year. Top of Preston’s list of priorities for his term is to ensure that the UK government’s main scheme, Help to Buy, is implemented in Scotland as quickly as possible.
“It is a game changer,” Preston says. “The sooner we get it, the sooner we get the change. It is in force in England. We need to make sure it works in Scots law. So we are playing catch-up.”
Critics have compared the UK government’s scheme – which includes equity loans for buyers of new houses, and in January, a wider mortgage indemnity scheme – to the nearly-failed US versions, Fanny Mae and Freddy Mac, handing the risk of home ownership on to the taxpayer. There is also concern that the scheme will inflate house prices.
But Preston dismisses this. “Freddy Mac and Fanny Mae were huge. Help to Buy is proportionate. The scheme is very welcome and helpful. Even if it won’t solve all our problems, it will help.”
As of the start of June, more than 4,000 people in England and Wales took the support. HfS expects the scheme to come into force north of the Border in October. The challenge is it is only a two-year project, which means it will have an even shorter run in Scotland. And, while Preston believes there are signs the sector is feeling more confident, it has suffered much pain.
While the delay in its arrival here seems to be a worry for HfS, Preston points to the Scots-born version that is operating in the meantime, “MI New Home”.
The scheme, which HfS developed with help from the Scottish Government, supports people with a minimum 5 per cent deposit on new homes below £250,000. It has been a “significant sales assist” to Scottish builders, says Preston. But the housebuilders in particular are keen to see the upper limit of Help to Buy – up to £600,000 – come north of the Border.
“About 25 of our members have picked it up. They all say it has made a difference and they are mighty grateful for it.”
Preston joined Veitchi last July. The sub-contracting firm, which was established in Glasgow in 1917, only moved into housebuilding three years ago. Currently the group builds 15 units a year, mostly in Aberdeen.
He brands Europe’s oil capital as “the mini-London”, because the two areas are the only parts of the UK where people are buying new homes in any significant number.
“You still have to build the right type of home in the right location,” he adds.
Prior to Veitchi he did stints at Balfour Beatty Construction, Cala Homes, Carronvale Homes and Persimmon Homes. His last gig was at Grangemouth-based Carronvale, which fell into receivership last year.
Despite its age and the fact it employs 340 people, privately-owned Veitchi tends to keep a low profile. “We like to keep quiet, we have done over the years,” says Preston.
He is happy with the support the Scottish Government has given the house-building sector but he wants to see more.
There is a feeling in the industry that local authorities still struggle to pave the way to get houses built. Preston is phlegmatic, although he would like to see more flexibility in up-front planning charges and the slowness of planning decisions.
And he adds bluntly: “Home building is one of the most effective ways of stimulating the Scottish economy. The vast majority of our products are sourced locally. Money invested in home building in Scotland stays in Scotland.”