PROPOSALS to build investor confidence in Scotland’s housing market have been published by the Scotland’s Housing Investment Taskforce.
The Housing Investment Taskforce report makes a number of recommendations to increase investment across the social, affordable, and private housing sectors.
These include exempting build to rent and mid-market rent properties from rent control, then implement positive and assertive communication on Scotland being open for business for new housing investment into these investment-ready sectors.
The report also recommends that, should the building safety levy be implemented – which would see a tax on developers to raise funds to help fix building safety issues – it should be managed to minimise impact on pipeline and viability.
A more ‘entrepreneurial’ approach from public bodies is also recommended, as well as considerations taken in whether or not efficiencies can be made in delivery of the new school buildings programme.
Scottish Government housing minister Paul McLennan said, “It is my ambition, shared by the members of the housing investment taskforce, to make Scotland the best place for housing investment. The report has identified a range of actions to support more investment across all tenures of the housing system to meet Scotland’s growth potential.
“We’re taking forward these recommendations in the Programme for Government and will work in partnership with taskforce members and other organisations to grow investor confidence to support the delivery of more homes across Scotland.”
Moda group planning director James Blakey added, “Addressing the housing emergency needs bold, imaginative and concrete actions, and we are proud to have collaborated with the housing minister and the taskforce over the last year to shape these. Working in partnership to create market certainty and viability is key to attracting crucial investment into Scotland so we can build the new homes people want and need.”
Communications director of Springfield, Karen Campbell, commented, “The taskforce’s report is clear on the value in building confidence, supporting new partnerships and creating the economic opportunity to unlock new and existing investment in Scotland. Working together we can now take those actions forward to deliver more homes across all tenures.”
The full list of proposals:
1. Exempt Build to Rent and Mid-Market Rent properties from rent control, then implement positive and assertive communication on Scotland being open for business for new housing investment into these investment-ready sectors.
2. Make Scotland one of the most attractive destinations for investment into all forms of housing, through clear, consistent and long-term policy.
3. Ensure the planning system is an enabler for increased supply, fast tracking decisions, resourcing pre-application discussions and appropriately considering viability of developments.
4. Economic development agencies to intervene to grow the contractor base.
5. Review the role of taxation in supporting housing investment.
6. If implemented, ensure the transition to Building Safety Levy is managed to minimise impact on pipeline and viability.
7. Provide certainty for education provision costs for the affordable housing sector.
8. Consider whether efficiencies can be made in delivery of the new school buildings programme.
9. Test market demand for loan options to support infrastructure costs where the scale or availability of finance is preventing build-out, including what risk/reward sharing models would be workable.
10. Use public sector land to create income streams rather than an up-front capital receipt.
11. Take a more entrepreneurial approach to development, prioritising areas where strategic economic opportunities align with areas of private sector housing pressure and leverage public sector assets (land, equity or subsidy) through a default ‘commercial first’ and risk/reward share.
12. Scottish National Investment Bank could take a key role in bringing together private/public sector partnerships and attracting private capital.
13. Reform law, including on long leases, to open up new opportunities for partnerships and a commercial shared-ownership model for home buyers.
14. Explore pension fund aggregator to support local authority borrowing.
15. Consider if guarantees to improve pricing from an institutional investor offers best use of resources.
16. Stimulate further discussions between RSL demand and investor appetite and discuss with affordable housing providers what further support would be appropriate and useful.
17. Make a long-term commitment to a minimum level of funding for new affordable housing supply recognising housing as critical infrastructure.
18. Co-produce a robust and evidence-based business case for public, affordable housing investment which will also support demonstrating social value in land disposal and targeting of investment at areas of acute need.
19. Reconsider whether allocation of affordable housing supply funds is maximising investment and value for money, take a more expansive approach to delivery with improved clarity on what safeguards are in place for tenants, and enter into strategic commitments with providers that can leverage private finance more effectively.
20. Publish data-driven performance and outcomes from affordable housing investment.
21. Assess capacity of the RSL sector to deliver new supply.
22. Allow RSLs to provide mid-market rental properties as part of core operations.
23. Seek a change in approach so that housing investment by local authorities does not count towards state borrowing, in line with international best practice.
24. Seek write-off of historic Housing Revenue Account (HRA) debt to provide immediate capacity for new supply.
25. Make legislative change to support greater flexibility for local authorities to transfer funds from the General Fund to HRA with statutory guidance to enable this in the interim.
26. Allow new entrants to deliver affordable housing on a ‘for-profit’ basis utilising public sector pension funds.
27. Investigate further the investment in assets for use as temporary accommodation.
28. Start work on multi-generational legacy of creating a revolving fund, and as seen in Denmark.
