Nicola Barclay: We need to home in on ways to beat the housing crisis
Ahead of the Homes for Scotland annual conference, Nicola Barclay discusses the need for housing, the social and economic benefits of home building and the constraints facing the industry.
For the first time since 2008 and the global recession, housing completions in Scotland have exceeded 20,000 per year. It has taken 10 years to reach this point but, in reality, we need at least 25,000 homes to be built in Scotland every year to address demand. In the face of Brexit, a general election next month and lower economic growth than the rest of the UK, it is vital that we nurture Scotland’s home building industry to maintain an upwards trajectory.
But I would say that, wouldn’t I, in my role representing organisations building the vast majority of the country’s homes and as someone with an over-riding agenda to deliver more. However, there is a lot more to home building than bricks and mortar. As well as putting roofs over our heads, it provides huge economic and social benefits.
Every new home built supports at least four jobs (including apprentices and graduates as well as those already in the industry) – so 80,000 on current figures. The industry also contributes £370m every year to government and local finances. In addition, as well as being fit for purpose and more energy-efficient, new homes bring many opportunities for local authorities, from additional council tax to the increase in footfall on our high streets and more children attending schools, so sustaining communities. On a daily basis, developers work in partnership with local authorities to improve existing community infrastructure where required, create new schools, provide outdoor spaces for communities to enjoy and upgrade essential infrastructure such as roads and waste-water plants.
Quality housing is crucial to the welfare of our people - everyone should have access to a home that provides a safe, secure and long-term foundation to live a happy life, yet this is often not the case. Whilst there are risks and uncertainty associated with the present political environment, the housing crisis does not go away: life goes on and people still need homes.
It’s important to stress at this point, that this is not just about home ownership and the private sector. We represent a wide range of developers, including SMEs and housing associations, and the issues they face ultimately affects all customers, whether they hope to own or rent a new home.
The industry as a whole faces multiple shared constraints.
Planning is a massive challenge. All housing providers need access to the right land, in the right place and at the right price but access is hugely competitive and restricted, particularly in strong markets where people desire to live and work. A wider allocation of land would provide more choice of location, style and price
Another significant factor is ensuring local authorities have adequate resources to process planning applications in a timeous manner. Too often, however, this is not the case with an average major planning application determination time of 32.5 weeks – more than twice the statutory 16-week timeframe.
Home building, like the wider construction industry, is facing a skills shortage. Career opportunities in the sector are often overlooked, limiting the talent pipeline, but the range of careers is vast and includes great opportunities for all genders. It is therefore crucial that the industry is recognised as an attractive and stable career option, providing strong routes for progression.
With the need for more homes, there is an obvious need for more companies to deliver them. Many home building companies were lost in the recession, particularly smaller companies with fewer resources and limited routes to finance. With access to finance and onerous payment terms still major challenges, these companies have been slower to recover than larger players in the industry – despite the strong demand for good quality homes that exists.
Regardless of the size of home builder and future political and economic uncertainty, we need to maintain momentum to meet the need for more homes, avoiding a repeat of the decade since the recession which has resulted in an undersupply of 80,000 homes. It is important to consider that increasing supply to pre-recession levels of 25,000 homes per year would generate a further 38,000 jobs, £1.bn more in economic output and over £50m in local infrastructure enhancements. This benefits not only those living in these homes but also our wider economy.
Delivering 20,000 new homes last year is a good accomplishment given the constraints that exist, but the reality is that we need around 25,000 new homes each and every year to meet the pent-up demand that exists. I look forward to discussing how we can achieve this at our eighth annual conference in Edinburgh next week.
- Nicola Barclay is chief executive of Homes for Scotland