What do we want? 700,000 new social housing properties - David Alexander
Although the policy is not without anomalies. It is surely illogical that the social housing sector – which generally houses people with the lowest income – can increase rents by more than the private sector charging up to 11% more but with an assumed 6% as the average. If this is a policy based on easing peoples’ finances during the cost-of-living crisis, why should those in social housing be subject to greater rent increases than those in the private sector?
However, despite the problems it caused the rent freeze has highlighted some of the major issues which currently face the housing sector in Scotland. Last week a report by the Joseph Rowntree Foundation recommended the building of 700,000 new social housing properties immediately across the UK to rebalance the market back to where it was in 1979. The Scottish proportion of that would be 63,000 homes.
Current housebuilding targets in both the private and social sectors fall far short of meeting the growing demand from a rising population; changing demographics creating smaller household sizes; and property available to meet the mobile population of migrant people who require housing for short periods due to work or study.
What is required, therefore, are policies which understand the need for continued and expanding investment in new housing for the homeowner market; which recognise that the private rented sector is, and will continue to be, an integral part of the rental market; and that Scotland needs a substantial and prolonged investment in the social housing sector if long term shortages are to be addressed.
But a rent freeze or rent cap are never the answer to the basic issue of supply and demand. If you want house prices to fall you increase the number of properties being built; if you want rents to fall in the private rented sector, you encourage investment from landlords, property investors and others to increase supply; if you want social housing rents to fall you build more social housing. It really is that simple but obviously also costly.
What Scotland needs is sustained, planned investment in all parts of the housing sector over a period that transcends the five year electoral timescale, and which aims to resolve most of the housing shortages over the next decade. Failure to plan, to liaise, and to work with all sectors in the housing market coupled with the stop/start policies which have prevailed in recent years will result in continuing difficulties and will not address the major issues we face.
There can be no return to rapidly introduced policies made without proper consultation. Any changes must be discussed and result in serious engagement with the relevant participants in the different sectors. Anything less will simply produce more problems in the years to come.
The market will be considerably less forgiving if after six months we end up with another rent freeze or an ill-judged rent cap beginning in October. Only by engaging with the whole housing sector will effective policy be devised.
Investment in property is measured in decades not months or years. We need to make Scotland as attractive a place as possible for investors, for landlords, for builders, so that we have an infrastructure which attracts entrepreneurs, global businesses, and wealth generators.
We need an outward looking welcoming country that wants homes for people, that attracts major investment, and that encourages people to live and work in our country. This requires planning, strategy, engagement with interested parties, and an outlook that welcomes business investment. The best way to provide many more affordable homes for people living in Scotland is to welcome investors, to encourage housebuilding, to support and develop social housing through adequate funding, and to put homeowners, landlords, and tenants at the heart of Scotland’s property market.
David Alexander is CEO of DJ Alexander Scotland Ltd
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