Scotland needs houses, and places to put them, says June Gilles
London is not unique in the UK in terms of property shortages and rising house prices. While it may not be on quite the same scale as the UK capital, it is undeniable that a critical shortage of housing is also becoming a significant issue in Scotland.
After five years of stagnation within our property market, this shortfall is now contributing to significant house price escalation north of the Border. Last month, The Scotsman reported that house prices in Scotland grew at their fastest rate in six years in the first quarter of this year, increasing by 7.6 per cent, significantly higher than the current rate of inflation which sits at just 1.6 per cent.
Audit Scotland, the body which supports the public spending watchdogs for local government and other government and public bodies, produced a report in July last year entitled “Housing in Scotland”, looking at “how Scotland’s housing sector works, how much public money is spent and what that money delivers”, assessing how well the Scottish Government and councils across the country plan to meet the nation’s housing needs, focusing on the role and performance of the public sector.
One of the report’s key messages was that the current supply of housing is not meeting the current level of need – it is estimated that Scotland will need more than half a million new homes in the next 25 years to achieve this balance.
The construction sector, which is such a vital component in ensuring new homes can be delivered, was one of the biggest casualties of the global economic downturn which began in 2008. The recession resulted in a reduction of more than 50 per cent in the number of new private homes being built at a time when Scotland’s population was increasing.
While we appear to be on a clear path to economic recovery the huge drop in building from the previous five years has created a housing deficit in Scotland and it could be more than 20 years before there are enough new homes to meet the projected increase in households in any one year.
One of the Audit Scotland report’s key recommendations to councils was to ensure that housing strategies and the associated plans and investment decisions are clearly based on evidence of local housing needs. Councils assess and respond to housing need in their areas and should have clear plans in place setting out how housing should be provided and, through their Local Development Plans (LDPs), where that housing should be built.
The Scottish Government’s Planning Policy document directs that LDPs should provide a “generous supply of appropriate and effective sites” to meet its specific needs. It also requires local authorities to set out a minimum five year plan for effective land supply at all times. Land allocation is a key aspect of LDPs as Scotland’s planning system is “plan led”.
This effectively means that any application for planning permission to build housing on land which has not been allocated for residential development may face a long and difficult struggle to succeed and it may simply be refused, if it does not have LDP support.
In terms of addressing the significant housing shortfall in south-east Scotland, the answer may lie in the new strategic development plan (SDP) for the south east area – known as “SESplan”. It covers the capital, the Lothians, Scottish Borders and part of Fife and was approved by Scottish ministers in June last year.
According to Scottish Government figures, the population of the SESplan area is set to increase by 17 per cent between 2008 and 2033, more than in any other SDP area in the country. Ministers declared that SESplan had failed to address the requirements identified in the SDP Housing Need and Demand Assessment and required supplementary guidance to determine the scale of the need for the area up to 2024, all of which is to be delivered through site allocations by each of the six SESplan councils in their own LDPs.
Following public consultation, completed towards the end of last year, the supplementary guidance is due to be adopted soon. People who operate within the Scottish housing sector are eagerly awaiting its publication, hoping that it will ensure that the councils will now deliver the generous supply of land for new homes that is so desperately needed.
• June Gilles is the head of planning at commercial law firm Davidson Chalmers www.davidsonchalmers.com