Brick by brick – new opportunities for affordable housing
One of the more often quoted sayings of the Chinese scholar Confucius is that “the strength of a nation derives from the integrity of the home”. It is perhaps telling how around 2,500 years later housing, and its impact on society, is still one of the hottest topics in the news.
Despite the Scottish Government announcing that it was on track to reach its five year target of delivering 30,000 affordable homes by March 2016, a report published on 10 June by the Commission on Housing & Wellbeing (a commission established by Shelter Scotland in 2013) makes stark reading claiming that more than 150,000 households are currently waiting for social housing, around 940,000 people are in fuel poverty, more than 60,000 households are classed as living in overcrowded homes and half of all housing in Scotland falls short of official quality standards.
The report sets out 47 different recommendations ranging from more contentious measures such as the abolition of Council Tax to an improved property tax to a rationalisation and limited intervention in rents in the private rented sector to less contentious measures such as the strengthening of the links between housing and the various outcomes of the National Performance Framework. Some of these recommendations appear to be more likely to be implemented than others but with the report claiming a shortfall of 7,500 homes being built in 2013/2014 alone (despite the Scottish Government’s Affordable Housing Investment Programme) the report emphasises the need to take action quickly.
With the brunt of statutory duties falling on local authorities in Scotland to manage homelessness, local authorities have a clear interest in both assisting various Scottish Government initiatives to increase the stock of affordable housing and also taking the lead within their local areas to do so.
Local authorities in Scotland have some new tools available to them to when considering how best to improve housing stock in their area. One of these tools, the new Custom and Self Build Scheme developed by Capita Asset Services, was discussed at recent event hosted by CMS in Glasgow. Boiling it down into its simplest terms, the Custom and Self-Build scheme is designed to remove some of the traditional risk associated with custom and self-build housing by placing control of the build with the local authority (who retains title of the land until sale) which then enables future home-owners to obtain up to 95% loan to value mortgages on terms similar to 75% loan to value mortgages from lenders. The local authority retains flexibility with regards to the applicants it will approve and the lenders carry out their normal diligence on any mortgage applicants. The wider aspiration of the scheme is to increase the availability of housing units, increasing the supply of affordable and social housing and providing access to custom and self-build, which are key corporate priorities for many local authorities.
Whilst it is unlikely that any single initiative will, of itself, bring an end to the housing shortage in Scotland it is worth remembering, as Confucius said, that each and every house is not just a statistic but a home which provides integrity to a family and which helps build the strength of the nation.
For more information regarding the National Housing Trust Initiative or the Custom and Self Build Scheme please contact James McDonald or Lynsey Brown.
