Kate Berry: Scotland’s changing housing landscape



As part of the programme to mark 20 years since the creation of the Scottish Parliament, the Scottish Parliament Information Centre (SPICe) looks at how Scotland’s housing landscape has changed over the last 20 years. This article was originally published on the SPICe website.

Back to the future?

Looking back at the first parliamentary debates on housing you might get a certain sense of déjà vu. Some of the problems MSPs spoke of, including a lack of adequate housing in rural areas, wouldn’t look out of place in a parliamentary debate on housing today.

During the first debate on homelessness in September 1999, the Minister talked about the government’s ambition to end rough sleeping. Fast forward almost 20 years to the most recent debate on homelessness in November 2018. The Minister spoke of his plans to, yes you’ve guessed it, end rough sleeping (more on this later).

Having said that, in other areas, the focus of debate has moved on.  For example, twenty years ago, there was a lot of talk about damp social housing. Since then, there’s been substantial investment in council and housing association stock and conditions have improved.

In 2019, there are new topics of debate illustrated by terms that hadn’t really been invented in 1999: ‘housing first’; ‘generation rent’; ‘mid-market rent’; ‘short-term lets’ and ‘bank of mum and dad’ to name a few.

So, 20 years after devolution, the parliamentary focus on housing is a mix of the old and the new. However, there have certainly been wider changes in our society which shape the context for housing policy and legislation.

Trends in housing

There are more households in Scotland as a result of population growth and more people living alone. There’s now almost 2.5m households in Scotland, about 13% more than in 1999. Further growth in households is predicted over the next twenty years or so. We will all need somewhere to live.

More of our population is older than in 1999 and the proportion of older people in the population is set to keep growing. This has implications for the type of housing and support services we need to be providing and planning for.

Although owner-occupation is still the most common tenure in Scotland, we can’t ignore the rise in private renting over the last 20 years. From about 5% of households in 1999, about 15% of households now live in private rented housing. A wider range of people live in private rented housing compared to 1999, including more families and those on low incomes.

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Younger people are less likely to own a home than at the start of devolution. The proportion of young adult householders (age 16-34) who are owner occupiers was 53% in 1999 compared to 35% in 2017.

The proportion of households living in social housing declined from about 32% of households in 1999 to about 23% in 2007. It has remained around that level for most years since then.

These tenure changes are interlinked. For example, the growth in private renting was partly driven by the decline in social housing and the decreasing affordability of owner occupation. Wider social trends such as immigration into Scotland, the rate of new household formation and growing student numbers may also partly explain these changes.

Changing fortunes of the housing market

In 1999, the average house price in Scotland was around £71k.  But by the early 2000s, fuelled by economic growth and the wide availability of credit, house prices were rising fast. By the mid-2000s there was a growing concern about the affordability of owner-occupied housing, particularly for first time buyers.

Suddenly though, the impact of the Global Financial Crisis in late 2007 hit Scotland’s housing market hard. House prices didn’t ‘crash’ though, they just stalled. However, as mortgage lending became restricted, sales volumes slumped, as did levels of new private house building.

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House prices are now above their peak levels with the average house price across Scotland around £181k in 2017. The improved economy, continuing low interest rates and Government initiatives to help people purchase a home have all helped to increase sales volumes and new private sector building. However, these are still some way off the highs of the mid-2000s.

Many first-time buyers still need large deposits to buy a home and many get assistance from the ‘bank of mum and dad’. This situation has been described as one which is neither desirable nor sustainable, and one that increases inequality.

Parliamentary activity

Although many of the factors driving these changes in the housing system are largely outwith the control of the Scottish Government, housing policy is firmly devolved.

At least eleven housing related Acts have been passed by the parliament since 1999.

There’s not space to cover all the legislation in this blog. Instead, we take a look at three main areas where devolution has created a more distinct Scottish approach to housing policy compared to other UK nations.

Right to buy

Perhaps the starkest example of the difference devolution has made to housing policy across the UK is on the right to buy.

Introduced in 1981, the right to buy remained largely unchanged for around 20 years until the Housing (Scotland) Act 2001 set in train a programme of reform. The 2001 Act introduced a ‘modernised’ right to buy for new tenancies with lower discounts. It also allowed councils to introduce ‘pressured areas’ to suspend tenants’ ability to use their right to buy.

As the Scottish Executive said, the aim of this was to, “create a better balance between the rights of individual tenants and the needs of the wider community”.

Further measures in the Housing (Scotland) Act 2010 ended the right to buy for new tenants and for new social housing.

Finally, in August 2016, 36 years after its introduction and the sale of almost 500,000 social houses in Scotland, the right to buy ended.

What impact will this have? From the start of devolution in 1999 to March 18, there were around 136,000 right to buy sales. But during this time there were only about 82,400 new social housing units built. In the early days of the Scottish Parliament at least, the pace of new building could just not keep up with the stock lost to sales (and demolitions).

It’s only really now with the end of the right to buy and a substantial increase in the Scottish Government’s affordable housing investment programme that we are likely to see an increase in the total amount of social housing stock in Scotland.

This was a significant departure from other UK countries. Wales has only just recently abolished the right to buy while it still remains in place in England and Northern Ireland.

Homelessness

From the first days of devolution a big policy focus was on homelessness.

The Scottish Executive established the Homelessness Task Force to make recommendations on how homelessness in Scotland could best be prevented and tackled effectively.

The Task Force’s reports influenced changes to legislation through the Housing (Scotland) Act 2001 and the Homelessness etc (Scotland) Act 2003.

In particular, the 2003 Act paved the way for the abolition of the distinction between ‘priority’ and ‘non-priority’ homeless in 2012. This meant more rights for single homeless people. All unintentionally homeless people are now entitled to ‘settled’ accommodation.

The 2003 Act was described as “the best homelessness law in Europe” and both ‘very ambitious’ and ‘radically different’ from England.

Despite the much-lauded legislation, it’s clear that some problems remain. Reports from the Scottish Housing Regulator and Committee inquiries have found evidence of homeless people not always getting the services they are entitled to under the legislation.

With a renewed political focus on homelessness, the Scottish Government established a Homelessness & Rough Sleeping Action Group in September 2017. Its remit was to identify actions needed to end rough sleeping and to transform temporary accommodation. The group’s recommendations are now being taken forward by the Scottish Government and local authorities.

When a fundamental driver of homelessness is poverty, it is questionable how much a piece of housing legislation can solve the problem. Housing services alone, without the input of other services, are limited in what they can do. But this has long been recognised and was indeed referred to in the first debates on homelessness after devolution.  We are still grappling with these issues.

Other UK nations don’t have all the answers either. But, Scotland is now more closely looking to what is happening in England and Wales, where a homelessness prevention duty has been enshrined in legislation.

Private rented housing

Legislation on private rented housing has been introduced in the parliament on an incremental basis, seemingly driven by the need to react to poor management and condition standards.

In 1999, the deaths of two students living in “death trap” Houses in Multiple Occupation (HMO) led to a reform the law on HMO licensing. Later reforms included the introduction of a private landlord registration system, tenancy deposit schemes and letting agent regulation.

More significantly though, the Private Housing (Tenancies)(Scotland) Act 2016 reformed the private sector tenancy regime which had been in place for almost 30 years.

The Act introduced the new private residential tenancy for new tenants from 1 December 2017. This addresses the problem of a lack of security of tenure by ending the ‘no fault’ ground for eviction. In addition, the 2016 Act contains measures to give tenants more certainty around rent increases.  It also allows councils to seek approval from the Scottish Government to introduce rent pressure zones to limit rents for existing tenants in areas where rents are rising excessively.

Although other UK countries have also introduced reforms to private rented housing law, the tenancy reform in Scotland represented a clear break with policy in other UK countries at that time.

Recently though, the UK Government has announced plans to end its equivalent of ‘no-fault evictions’ as has the Welsh Government. How much the proposed change in those countries will mirror that in Scotland remains to be seen.

What’s next?

Affordability of housing is ongoing issue that is unlikely to go away soon. Housing benefit spend in Scotland is still around £1.7bn a year. Although this represents a real-terms fall of around 15% since 2000/01, the sheer level of spend would suggest there’s something not quite right in the system.

Longer term, the Scottish Government is in the process of developing a vision for housing for the 20 years post 2021. In its first wide-ranging discussion paper, the Scottish Government noted the challenges including Brexit, climate change, and UK Government welfare reform.

It’s early days yet, but the paper signalled its intentions to:

  • change the way we spend public money to support housing services and delivery.
  • ensure that the economic and business environment supports housing investment and an efficient housing market.
  • make our housing system fairer, especially for young people and others who do not currently own a home.
  • explore new sources of funding for, and innovative ways of, building homes and providing care and other services at home.
  • set new standards around accessibility, energy efficiency, quality and safety

These are certainly lofty ambitions. How these ambitions might be achieved has still to be worked out.  Twenty years from now in 2039, will we still be talking about how to achieve such ambitions? Will we still be looking back at parliamentary debates in 2019 with that same sense of déjà vu? Let’s hope not.

  • Kate Berry is senior researcher (housing) at SPICe


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