We need to free up more land for new-build homes - David Alexander

When my parents’ generation first started married life their big concern was obtaining a house that was wind and watertight and offered a basic standard of comfort.

Back then the huge numbers of “artisan” properties that had been constructed with such rapidity in the previous century by private landlords and factory-owners were beginning to show their age and structural problems starting to emerge. Added to that was the fact that many had lacked basic amenities from the outset, such as an inside toilet. True, council-house building across the UK had started on a large scale shortly after the end of World War One but even by the end of World War Two only a minority of working-class families were housed in this facility.

Fast forward seven generations and there is no shortage of housing available (at least privately). What concerns most people attempting to rent or to get a foot on the home-ownership ladder is the affordability of the stock.

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The Westminster housing secretary, and erstwhile Aberdonian, Michael Gove, admitted as such at the end of last week when he put the Conservatives’ poor showing at the local elections down to lack of support for young, property-owning aspirants.

Michael Gove, has blamed lack of support from young, property-owning aspirants for the Conservatives’ poor showing at the local elections in LondonMichael Gove, has blamed lack of support from young, property-owning aspirants for the Conservatives’ poor showing at the local elections in London
Michael Gove, has blamed lack of support from young, property-owning aspirants for the Conservatives’ poor showing at the local elections in London

Now Mr Gove was speaking specifically about the party’s performance in London and its loss of control of the boroughs of Barnet, Wandsworth and Westminster and, yes, the housing situation in London is not reflective of the whole of England just as England is not reflective of Scotland either.

I am, however, surprised, that housing is not the political issue in Scotland as it is in London – because it should be.

There are, of course, limits to what politicians can achieve but within the powers they do have are actions that would increase housing choice and affordability – for all classes of Scots.

Let me start by calling – as this column has done several times – for more public housing. Many families currently paying commercial rents would have been allocated a council house 40 years ago but the big sell-off to sitting tenants (and non-replacement of stock) stopped all that. Unfortunately landlords are unfairly criticised when all they are doing is charging the market rent, sufficient to provide them with an acceptable return on investment. And at least they are providing a roof over peoples’ heads; were it not for private landlords even more families would be homeless than is currently the case.

David Alexander, head of DJ alexanderDavid Alexander, head of DJ alexander
David Alexander, head of DJ alexander

While more council housing would release pressure on the private rented sector, I’m confident any adverse effect on the latter would be marginal. In other words, demand from those tenants able to afford commercial rents would still be sufficient to keep the market buoyant.

Affordability, however, is not just a rental issue. As the population grows and people demand more personal space, existing owner-occupier stock must be complemented by new-build, one of the main drivers of the cost being land. Housebuilders will, of course, attempt to squeeze as much profit out of each site but land is the great contributor to base price. Therefore making more virgin land available for housing should be reflected in cheaper land and, by implication, more competitive new-build prices.

While one respects the concerns of central and local government to prevent “urban sprawl”, the fact is that only around 5 per cent of Scotland is actually built-up (which is less than half of England). Clearly a huge chunk of the Scottish land mass is not suitable for development because of unsuitable terrain or remoteness but surely there is scope, even in the Central Belt, for a more liberal policy towards land for house-building?

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Another vote-losing issue referred to by Michael Gove related to young people who paid more in rent than they would on a mortgage but did not qualify for a home loan.

This is, in part, a consequence of the bad debt inherited by banks and building societies during the early noughties when LTV (loan to value) mortgages of up to 125 per cent were on offer. The inevitable result is now stricter criteria for mortgage applicants.

Sadly, with interest rates on the way up, not down, I do not see this changing anytime soon.

David Alexander is managing director of DJ Alexander



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