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Foundations Laid - Building Blocks Required

Foundations Laid - Building Blocks Required

With a record 865 senior industry representatives in attendance, the Homes for Scotland Annual Lunch and Awards ceremony was an undoubted success. The aptly named “Foundations for the Future” slogan an indication of a more promising outlook and an industry sector that is more upbeat and optimistic about future prospects than before. It is clear that momentum is building and that the foundations the sector needs are slowly being laid. The economy is improving, the UK elected government has a positive election manifesto to deliver, interest rates remain low, there is renewed appetite amongst some lenders in the sector and the demand for new housing is demonstrable.

So many of the key ingredients required for solid foundations are in place. Now we need building blocks. Allocated land that is demonstrably deliverable; a speedier and more efficient planning process;  improved interaction with key agencies to provide the necessary service infrastructure; and, importantly, continued support from the Government to maintain and build upon the initiatives that have helped kick start the recovery.

The new Chair of Homes for Scotland, Jim Mather, called on the Scottish Government to “evolve” its hugely successful Help to Buy shared equity scheme in order to maintain the positive progress that has been made in supporting buyers, stimulating the building of new homes and creating jobs. This follows news earlier this week that the scheme has to date resulted in 5000 sales worth £1bn.

Jim urged the Scottish Government to announce details of what new support will be in place after the planned end of Help to Buy (Scotland) in March next year so that both buyers and builders have the confidence and predictability necessary on which to base their purchasing and investment decision-making.

The urgent need for new homes of all tenures is an issue of national priority and Jim rightly called for this to be raised to the top of the public policy debate. Mather also emphasised the need for the Scottish Government to work closely with the industry and other key stakeholders to avoid unintended negative consequences that could not only damage the industry’s ability to deliver much needed homes, but also diminish the economic and social benefits that would otherwise accrue.

So the table was set and the guests waited with eager anticipation to hear Housing Minister, Margaret Burgess, outline the Scottish Government’s proposals.  We heard that "The Scottish Government has invested hundreds of millions of pounds to pursue a range of initiatives to support private sector activity” and “Whilst the delivery of affordable housing remains our top priority, the Scottish Government is committed to see an increase in supply across all tenures, delivering a strong sustainable economy and supporting a fairer society.

Proposals for funding infrastructure are in the pipeline, with planning advice on the issue to follow.

A laudable statement of intent but further detailed and suitable plans must evolve quickly. Many had hoped that the Minister would use the Annual Lunch as a platform to announce further funding (as Nicola Sturgeon did the previous year) or to give some detail to the Scottish Government’s next steps, but they were left disappointed in that respect. Worse than that, the Scottish Government has since issued a seven day notice highlighting that the current Help to Buy scheme will close on 26 May 2015.

The sector cannot afford to drift into a period of uncertainty that could damage the foundations for the future that have been set and the challenge for the Scottish Ministers is to set about this task with urgency and announce further positive measures as soon as possible to support the housing industry and aid the continued recovery that will deliver the aspirations of her statement of intent.

With the right mix we can all build on the foundations that have been laid. Let’s hope we are toasting to the Scottish Government getting that right by the time Homes for Scotland are handing out next year’s awards.

In the meantime, congratulations to Springfield Properties, winner of this year’s Homes for Scotland award for Home Builder of the Year.

Richard Goodfellow
Partner

LChalmers