Scottish Land & Estates members have provided housing in the rural private rented sector for generations and also contribute to new housing, both on a small scale or some of the largest new developments in the country, such as pioneering Tornagrain near Inverness, which is being delivered by Moray Estates.
However, most who have been involved in building or managing housing would acknowledge that current policies and legislation are not conducive to delivering new homes, with Savills research demonstrating regular annual shortfalls of around 15,000 homes.
This is especially acute in rural areas where the housing market is significantly different. In the rented sector, the average occupation of a property in Scotland is 2.8 years – in our members’ experience, rural tenants stay for an average of 8.5 years.
Recently, a new discussion paper in the Land Lines series, published by the Scottish Land Commission, considered the housing land market in Scotland. One of its central arguments was the value of land, namely that prices are too high and supply is low because local authorities are prevented from purchasing land at existing use value.
Whilst many would accept that issues over land banking and land value can stifle house building, such an argument does little to explain the problems that exist in a rural context rather than an urban one. Scottish Land & Estates members have access to land and are willing to deliver much needed housing, yet they still encounter significant issues.
A recent survey of our members found that 52 per cent were interested in developing new housing. Although there are geographic variances, there is a general need to develop new housing to ease housing demand or encourage rural development.
Development needs to be delivered at an appropriate scale and in considered locations. Some areas need whole new settlements, while in others a small number of homes will make a difference, with the school remaining open and a local business continuing due to new families and employees moving into the area.
A recommendation put forward by Scottish Land & Estates is to rejuvenate a wider network of rural housing enablers – independent individuals or organisations creating effective partnerships and working through the rural development barriers. This approach, championed by Rural Housing Scotland and Small Communities Housing Trusts in Highland and Dumfries and Galloway requires financial support but the added value and effectiveness has been proven in the past. Regulatory and cultural change is also needed in certain key areas, such as planning, finance and infrastructure.
Whilst the planning system is currently under review, at present it lacks flexibility and ‘rural proofing’. Our members say it is slow, under-resourced, and has an anti-development culture. This is coupled with some members finding a lack of external developers willing to take on small rural sites.
A one size fits all approach encompassing both urban and rural locations does not work. A flexible and enabling planning system, encouraging collaboration between local authorities and external parties would help, as would mechanisms to allow existing buildings, such as agricultural buildings, to be more easily converted to affordable housing without innumerable planning hurdles.
We also encourage greater use of policy tools such as rural housing burdens and rural exception sites – small plots of land gifted or sold at below market value – to deliver affordable housing. Despite these tools having been around for a few years, work still needs to be done to increase support from local authorities, encourage buyers and gain understanding from lenders.
The cost of housing development, which is much higher in rural areas, is also an issue especially where the local market is not buoyant or the planned output is affordable housing.
Developer contributions, materials and their transport, and labour costs, all contribute to this. We have seen mechanisms such as the Scottish Government’s Rural Housing Fund try to enable housebuilding but uptake has been poorer than previous similar funding initiatives – we would like to see the terms of this fund reviewed.
Similarly, tax conditions which disincentivise investment need to be considered – we would like to see the provision of rollover relief of capital gains tax to incentivise property disposals and land sales in rural exception sites.
Finally, access to infrastructure and services is a persistent problem in the countryside. Services which housebuilders can tap into easily in urban areas present a far bigger challenge on rural projects and that often means a far higher cost for the developer, which undermines the viability of rural housing projects.
There is also an issue of poor co-ordination between utility providers, which can add costly and long delays to delivery. We have argued that the introduction of a rural housing infrastructure fund, aimed specifically at small rural projects, could help address some of these issues. It is vitally important that public policy encourages quality, well-managed homes, vibrant tenancies and new developments.
Whilst issues over land access will be one part of a wider jigsaw, it won’t be the silver bullet in increasing rural housing supply, including homes let at affordable rents. Landowners remain committed to helping address rural housing shortages – with collaboration and more flexible policy-making targeted towards the specific needs of our countryside, there is no reason why we cannot deliver collectively for rural Scotland.
Katy Dickson, senior policy officer (business, property and connectivity) at Scottish Land & Estates.