Scotland shows the way on affordable housing

First posted as a blog for Inside Housing on February 27. 

News that Scotland is on track to deliver its ambitious plans for affordable homes is great news in itself but it also shows those further south what can be achieved when a government and the housing sector are determined enough.

The Scottish Government has promised 50,000 affordable homes, of which 35,000 will be for social rent, between April 2016 and March 2021. This is the largest programme of its kind since the 1970s.

And an independent analysis of local authorities’ Strategic Housing Investment Plans (SHIPs) published on Monday find that Scotland should deliver between 45,000 and 50,000 affordable homes and up to 34,850 for social rent.

That’s impressive enough but even more so when you consider it in the context of what’s happening (or not) further south.

Scotland has an estimated population of 5.4m, compared to 3.1m for Wales and 55.3m for England. That 50,000 target is therefore the pro rata equivalent of 29,000 affordable homes for Wales and 512,000 for England.

The Welsh Government is doing its best with a target of 20,000 affordable homes between 2016 and 2021. If that is still fall short of Scotland, Wales does have a much less generous financial settlement under the Barnett formula.

In England, the single department plan of the Department of Communities and Local Government included a pledge to deliver 400,000 affordable housing starts by 2020/21 but that has now been withdrawn and the target does not appear in the single departmental plan of the Ministry for Housing, Communities and Local Government.

And, whatever the significance of that, ‘affordable’ means different things: England is at last funding social rented homes again rather than just affordable rent but one reason that target disappeared is that half of those 400,000 were going to be starter homes sold at a 20% discount to first-time buyers.

Most of those would simply have displaced other types of affordable housing but thankfully 200,000 turned out to be a non-starter.

By contrast, the analysis commissioned by Shelter Scotland, the Scottish Federation of Housing Associations (SFHA) and the Equality and Human Rights Commission in Scotland finds that Scottish housing associations and local authorities are set to beat that target that 70% of the 50,000 affordable homes should be for social rent.

With that in place, Scotland can afford to be relaxed about the inclusion of other types of affordable housing in some local plans – for example, a Limited Liability Partnership between Aberdeen City Council and Places for People is planning 900 homes for affordable rent and private sale without any government subsidy.

The report does include some caveats on construction industry capacity and optimism bias among stakeholders but it also says that it is possible that updated SHIPs will propose higher numbers for completions,

The north-south divide is even greater when you look at net rather than gross supply. The assessment finds that the social housing stock in Scotland will increase from 595,000 to 618-620,000 by 2021, a net increase of 25,000 after demolitions and conversions.

Contrast that with England, where the Chartered Institute of Housing (CIH) estimates that 120,000 social rented homes will be lost over the same period.

One reason for this is that Scotland (and now Wales) have ended the right to buy while England has increased discounts and reduced the qualifying period.

However, a bigger reason is continuing conversions from social to affordable rent by some housing associations – as Tony Stacey argues this week, these may have been understandable immediately after 2010 but they have to stop if the sector is serious about genuinely affordable housing.

There are lessons to learn from Scotland about the way that robust research about the level of housing need helped win support from the political parties ahead of an election and the joint commitment of the government and the sector to delivery that followed.

Local government in England, particularly in cities with elected mayors, is desperate to step up to the affordable housing challenge but it still has to operate with a framework set by central government.

Further devolution should include not just choices over investment but increases in Housing Revenue Account borrowing caps and the power to suspend the right to buy in areas where local administrations set out the case for it and win the backing of their electorate.

England has already borrowed its approach to homelessness prevention from Wales and (soon hopefully) letting agent fees from Scotland and it has much more to learn from developments outside its borders on the right to buy, priority need, co-operative housing and greater security and the end of no-fault evictions for private renters.

But it should look to Scotland for an example of what can be achieved in terms of genuinely affordable housing.

Until it does all talk of ‘radical’, ‘bold’ and ‘ambitious’ plans should be banned let alone references to a ‘council housing revolution’.

2 Comments on “Scotland shows the way on affordable housing”

  1. Chris Daniel says:

    Are you Serious ?

    44% of Scottish tenants saw their rent costs rise in January, a considerable contrast to the national average of 19%, ARLA Propertymark reveals.

    The findings come following the introduction of the new Private Rented (Tenancies) (Scotland) Act on 1st December 2017, highlighting a market reaction to indefinite tenancies and the potential for rent controls.

    • julesbirch says:

      What’s happening in the private rented sector is a whole different story. Some would argue Scotland also leading the way there by ending no-fault eviction – but other point to the many loopholes. Still too early to say, I think, especially based on one month’s data from a not exactly disinterested organisation

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