For the first time since 2008 and the global recession, housing completions in Scotland have exceeded 20,000 per year. It has taken ten years to reach this point but, in reality, we need at least 25,000 homes to be built in Scotland every year to address demand. In the face of Brexit, a general election and lower economic growth than the rest of the UK, it is vital that we nurture Scotland’s home building industry to maintain an upwards trajectory.
I would say that, wouldn’t I, in my role representing organisations building the vast majority of the country’s homes. However, there is a lot more to home building than bricks and mortar. As well as putting roofs over our heads, it provides huge economic and social benefits.
Every new home supports at least four jobs (including apprentices and graduates) – so 80,000 on current figures. The industry contributes £370 million each year to government and local finances. As well as being more energy-efficient, new homes bring opportunities for local authorities, from additional council tax to increased footfall on our high streets and more children attending schools, so sustaining communities.
Developers work with local authorities to improve existing community infrastructure, create schools, provide outdoor spaces for communities and upgrade essential infrastructure.
Quality housing is crucial to people’s welfare – everyone should have access to a home that provides a safe, secure and long-term foundation to live a happy life, yet this is often not the case. While there are risks and uncertainty associated with the present political environment, the housing crisis does not go away – life goes on and people still need homes.
It’s important to stress that this is not just about home ownership and the private sector. We represent a range of developers, including small businesses and housing associations, and the issues they face ultimately affect all customers, whether they hope to own or rent a new home. The industry faces multiple shared constraints, starting with planning. All housing providers need access to land in the right place and at the right price but access is hugely competitive and restricted. A wider allocation of land would provide more choice of location, style and price.
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Other significant factors are ensuring that local authorities have resources to process planning applications in a timeous manner and tackling the skills shortage. Career opportunities in the sector are often overlooked, limiting the talent pipeline, but the range of careers is vast and includes great opportunities for all genders. It is crucial that the industry is recognised as an attractive and stable career option, providing routes for progression.
With the need for more homes, comes the need for more companies to deliver them. Many housebuilders were lost in the recession, particularly smaller ones with fewer resources and limited routes to finance. Access to finance and onerous payment terms remain key challenges, and these firms have been slower to recover than larger players – despite the strong demand for quality homes.
Regardless of the size of home builder and political and economic uncertainty, we must maintain momentum to meet the need for more homes, avoiding a repeat of the decade since the recession which has resulted in an undersupply of 80,000 homes. It is important to consider that increasing supply to pre-recession levels of 25,000 homes per year would generate a further 38,000 jobs, £1 billion more in economic output and more than £50m in local infrastructure enhancements.
Delivering 20,000 new homes last year is a good accomplishment given the constraints that exist, but the reality is we need around 25,000 new homes each and every year to meet pent-up demand. I look forward to discussing how we can achieve this at our eighth annual conference in Edinburgh next week.
- Nicola Barclay, chief executive, Homes for Scotland.