Housing plan is a solid start — but Scotland needs more

Scotland’s cabinet secretary for housing, Màiri McAllan, joined our members to talk about how the Scottish government plans to address the housing emergency. It also provided an opportunity to discuss Housing supply for a growing economy.  Our policy manager Peter Hourston reflects on the event.

Since being reappointed to the Scottish government in June as a dedicated housing secretary – the first time the portfolio has been its own cabinet position – McAllan said that she had been acting as a “sponge”, listening to voices across the industry and charities tackling homelessness.

Those conversations have brought into sharp focus why the Scottish government (along with more than a third of Scotland’s local authorities) declared a housing emergency last year: supply not keeping up with demand, rising homelessness, the legacy of the financial crisis, funding shortfalls, Brexit, covid and inflationary pressures were some of the external factors that the housing secretary cited. But, to her credit, McAllan was also candid in acknowledging that recent government policies had presented difficulties for the sector.

Attracting investment will provide the means to solving the housing emergency

Much of the discussion focused on how to restore investor confidence in the housing market in Scotland. The cabinet secretary was candid in addressing investor concerns through welcome changes to the Housing Act which was recently passed by the Scottish parliament, such as exempting mid-market rent and build-to-rent developments from rent controls. A balance was needed, McAllan argued, to ensure that tenants’ rents do not rise exponentially while not compromising opportunities for investment.

Increasing investment in housing requires private and public sectors to work together. As part of the government’s action plan to tackle the housing emergency, an extra £4.9bn of public funding has been committed over the next four years for affordable homes. This will help leverage extra private investment.

Where that additional investment is channelled will also be key. In our report, we called for an all-tenure approach and the cabinet secretary signalled her strong commitment to this recommendation, noting that the provision of both affordable and all-tenure homes is not in conflict.

Investment in modern methods of construction and workforce skills – two major themes of our report – will also lead to improvements on the ground. McAllan commented that certainty in the direction of government policy would help establish an effective market for factory construction and also allow the industry to invest in its people.

Improvements to the planning system need to deliver results

Alongside investment, the planning system was at the forefront of the conversation. The Scottish government has introduced a raft of measures in recent months to bring stability and predictability to the planning system, including specific attention on stalled sites, an emergency-led approach to determining planning applications, proportionality for SME housebuilders, a new national planning hub and a notification direction whereby local authorities need to inform ministers of developments of more than 10 units.

All of this is encouraging, but McAllan and her ministerial colleague responsible for planning, Ivan McKee, will need to be prepared to go further if the desired results do not materialise on the ground. The housing secretary commented on the merits of bringing back the presumption in favour of sustainable development and committed to more monitoring of development applications.

McAllan’s focus on action and delivery is commendable

The housing secretary remarked that announcing a plan – as she did in September – was not enough. Words need to be backed up with action. The sector will no doubt be pleased to hear this sentiment, which is particularly important in housing. McAllan’s success (or otherwise) in tackling the housing emergency will require getting lots of ducks in a row: planning authorities, builders, landlords, housing associations, the tertiary education system, homelessness charities and many more.

Since taking up office – and getting the Housing Act finally on the statute book – Màiri McAllan has brought some much need calm to Scotland’s housing sector. Creating the right conditions for building new homes will require a careful balance between different interests while continuing to project stability, certainty and confidence.