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RICS Scotland Housing CommissionEmerging Issues

Housing Policy Advisory Group Meeting

28th January 2014

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Context to Commission

• RICS UK Commission: ‘More Good Homes and Better United Kingdom’ published in June 2013

• Thorough & comprehensive analysis lacked Scottish detail given:– Differences in housing system operation– Level of devolved powers that affect housing

• RICS Scotland Chair: short term, independent, solutions focused Commission for Scotland

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Purpose of the Commission:

1.Provide a sector-wide view of current condition of the Scottish housing system

2.Pinpoint the most significant barriers to effective housing system operation

3.Develop new, consensual ideas to alleviate them

Aims of Commission:

1.Deliver an objective & credible housing system assessment

2.Define policy options for practitioners and enablers

3.Shift housing to a higher position on political & media agenda

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Scope of Commission

1. Panel of 10 Commissioners with remit to:– Assess & evaluate the evidence provided – Ask further questions for clarification– Discuss evidence & develop recommendations

2. Process for submitting evidence: 3 Methods1. Respond to set Commission questions

2. Submit proposals on any element of housing system operation which could be improved

3. Provide examples of innovation & good practice

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Scope of Commission

3. Scope of evidence – Oral evidence: 22 evidence providers– Written evidence: 38 written submissions

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Themes & Recommendations

In order to develop a housing system that functions for all…

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Planning Housing: Emerging Issues

1. The strategic assembly of a generous & more effective land supply is essential– Land premiums are a signal of housing system dysfunction

that needs action

2. Strategic planning should be elevated on corporate & political agendas to address short-termism 1. Drive innovation/collaboration to enable housing

development

3. Planning authorities must improve certainty by taking strategic action on infrastructure & enabling delivery– Do we expect the private sector to do too much?

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Planning Housing: Emerging Issues (cont.)

4. Master-planning must focus on building communities through good design/density & connectivity to economic & social infrastructure

5. HNDA analysis should be demystified & improved• We need better intelligence of household circumstances

& consumer intentions across all tenures• The impact of intermediate housing in meeting housing

need must be recognised• Leadership is needed on using HNDA intelligence to set

housing supply targets & define 5-year land supply

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Paying for Housing: Emerging Issues

1. House price to earnings ratios are too high despite (some) price readjustment during recession– Rising interest rates could exacerbate problems & create

repossession risks for those highly indebted

2. SME builders are struggling to access bank finance & development funding

3. Risk profile of social housing sector is changing: finance over shorter period & less favourable terms– Innovative funding/joint venture models need to emerge

4. Potential impact of Land & Building Transaction Tax

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Building Housing: Emerging Issues

1. Lack of viable/reliable land supply & low levels of prime land in locations where people want to live

2. A de-skilling of the construction industry is a genuine risk– Evidence of reduction in industry capacity, a loss of skills &

apprenticeships & deficit in the material supply chain

3. Clyde Gateway, Ravenscraig & Dundee Waterfront are exemplary housing regeneration projects: we need more!– Collaboration, strategic land assembly, infrastructure

investment on a major scale

4. Energy & carbon reduction agenda increases build costs– Puts further pressure on a weakened construction sector

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Managing Housing: Emerging Issues

1. Improving the condition of Scotland’s private housing stock is an urgent priority– Homeowners need support to invest in conservation & repair– Low cost finance, reductions in VAT for refurbishment

2. Investing in empty homes delivers real benefits: – From a cost efficiency, sustainability, environmental &

regeneration perspective

3. Given its increasing influence, the growth & improvement of the PRS needs strategic focus, leadership & investment

4. We need to make the case for housing in Scotland– Impact on economic growth, health, well-being & attainment

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Timetable & Next Steps

• End of January: Emerging issues presented at RICS Scotland Residential Conference: further sound-boarding

• Mid February: Approval of draft report by Commissioners

• End of February/Early March: Commission reconvenes to consider recommendations

• Mid March: Report finalised

• Mid April: Report launched