Alternative ways to build Scottish housing needed to hit targets

The Royal Institute of Chartered Surveyors says custom-built properties are needed

The Scottish Government needs to find alternative ways of creating housing developments if it is to reach its targets for new homes, the Royal Institute for Chartered Surveyors has warned.

RICS said the government needs to consider self-build, custom build and built-to-rent properties, as well as co-housing, to combat an expected slowdown in traditional, developer-led projects. It warned that the current political and economic climate would mean that developers were not likely to invest in new projects at the necessary rate.

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The report added that the Scottish housing market ended 2018 on a weak note with political and economic uncertainty still biting, alongside continuing lack of stock and affordability issues.

Hew Edgar, RICS interim head of policy, said: “Given the current political and economic environment it is hard to see developers stepping up the supply pipeline to meet the quantum of new builds. Reaching the required 25-30000 homes per year building target was never going to be easy, but to reach anywhere near this figure the Scottish Government needs to explore other avenues for housing development across all tenures. The government’s 50,000 social homes by 2021 target is commendable, but their focus needs expand beyond social housing and support other delivery models and tenures, such as self-build, custom build, built-to-rent and co-housing.

“Simultaneously, the Scottish Government must not lose track of existing properties and the maintenance requirements of current housing stock. If government policy continues to be aimed exclusively at new supply, and the condition of older stock is not given due consideration, existing dwellings will continue to deteriorate, reaching a state of inhabitability in the near future. This will essentially negate new build figures and ultimately lead to viable housing supply in Scotland remaining static.”

Housing minister Kevin Stewart said the Scottish Government target to build 50,000 affordable homes by 2021 includes 35,000 for social rent as well as homes for mid-market rent and low-cost ownership.

He said: “We also launched a £4m self-build loan fund offering financial assistance to self builders in September 2018. This was developed to address market failure in terms of self-build finance and to encourage the market to reintroduce appropriate self build funding. This is a national fund and is available in both urban and rural areas.”

The report found that short term sales expectations across Scotland were negative for the second consecutive month with a net balance of -23 per cent more respondents predicting a decline in sales over the next three months. The twelve-month outlook was a little more upbeat, suggesting that some of the near-term pessimism was linked to the lack of clarity around Brexit.

Despite this, house prices in Scotland remained steady, with a net balance of 19 per cent more respondents reporting growth during December. Looking ahead, however, this positivity stalls, with a net balance of -11 per cent of chartered surveyors expecting prices to fall over the next three months.

Simon Rubinsohn, RICS chief economist, said: “Looking a little further out, there is some comfort provided by the suggestion that transactions nationally should stabilise as some of the [political] fog lifts, but that moment feels a way off for many respondents.”