Scotland needs more affordable housing; this is nothing new. The scale of the challenge is historically immense. However, it seems the affordable housing crisis may now be having a substantial impact on the Scottish economy.
According to Shelter, the housing charity, “36% of households in Scotland struggle with the condition, security, suitability, or affordability of their home, or report being discriminated against while trying to find one”. Shelter Scotland also found that nearly 2 million people are currently being affected by the affordable housing crisis.
The Scottish Government has committed £3.2bn to social housing over the next five years. Ministers want to build 100,000 affordable homes across Scotland by 2032, with at least 70% of them available for social rent from either councils or housing associations. However, Covid has had a detrimental effect on the completion of affordable housing. In 2020–2021, there were 6,477 units completed through all Affordable Housing Supply Programme activity, a decrease of 2,819 units (30%) on the previous year.
This is not just a Central Belt or big city phenomenon. The lack of affordable housing in many Highland communities is also beginning to put the brakes on the economies there; restricting the pool of workers available to local businesses, punching holes in the provision of public services and impacting badly on the quality of life in our remote communities. This isn’t just about the lack of nurses, teachers, or builders. This is an issue that affects the future viability of whole communities.
What is ‘affordable housing’ and who is responsible for providing it?
According to Nucleus, an ‘affordable rent’ is set at up to 80% of the market rent for local private lettings. The tenancy for such a property is fixed for a minimum of five years.
In Scotland, the Housing Need and Demand Assessment (HNDA) A Practitioner’s Guide (2020) places the responsibility for the provision of affordable housing rests with local authorities. It states,
“The Housing (Scotland) Act 2001 places a responsibility on Local Authorities to prepare a Local Housing Strategy (LHS) supported by an assessment of housing need and demand and the provision of related services. An HNDA serves to provide this assessment.’“
Local authorities have been starved of cash by the UK government and are under pressure to offload their social housing stock either to existing tenants under the ‘Right to Buy ‘scheme, or to housing associations. To give credit where it’s due, the Scottish government have tried to restrict the full impact of market forces on the Scottish Housing market. The Right to Buy in Scotland was established by the Tenants’ Rights, Etc. (Scotland) Act 1980.
Subsequent legislation, by the UK Parliament and following devolution, the Scottish Parliament made various amendments to the terms under which tenants could exercise their Right to Buy. Subsequently the Right to Buy has been abandoned. In July 2016 the Scottish Government published a document ending the Right to Buy in Scotland.
“Between the years 1979-80 and 2014-15 a total of 494,580 council and housing association homes were sold under Right to Buy in Scotland – homes no longer available to later generations who wanted to rent in the social housing sector.’“
The same document also claims that, “Ending Right to Buy will protect the housing stock that is available for social renting”.
It says nothing about the need to increase the housing stock available or about the changing housing needs of an ageing population. More people living alone need smaller houses. Many people renting their homes need better standards of accommodation including upgrades to the insulation in their homes and installation of electrical microgeneration capability, i.e. solar panels linked to batteries to enable them to generate the electricity they need to run their homes.
Why are we short of affordable housing?
The cost of rents has hit record highs across Britain. According to Rightmove, the average advertised rent is 11.8% higher than a year ago. They report that the stock of available rental properties was down by 26% compared with last year’s figures. Demand was up 6%, adding pressure to rents and to tenants.
The stock of properties available for long-term rent may have fallen as landlords switch to short term, Air B&B type rents as they realise, they can make more money this way.
Covid-19 has forced many to reassess their working lives and where they want to live. Those who can work from home no longer need to live in the city and have opted to live in the country or by the coast. This puts pressure on the availability of accommodation in these communities. If you cannot work from home, and there are many professions where this is impossible, then you may find your rent has increased as private landlords cash in on the buoyant rental market across the country.
Tourism and short-term lets
In Scotland, tourism further distorts the housing market.
The National reported in September 2021 that according to the council:
“Relative to other areas in Scotland the number of Airbnb listings is high making the impact on the city disproportionate. In 2019, 31% of all Airbnb listings in Scotland were in the city of Edinburgh. The next greatest proportion was 19% in Highland.”
In 2017, there were over 14,000 registered tourism businesses in Scotland, a figure guaranteed to have increased since. This is one in twelve of all registered businesses. Scottish tourism is worth more than £11bn to the economy, according to a recent assessment carried out by VisitScotland. The tourism body has calculated the value of direct and indirect spending, and concluded it represents 4.5% of the Scottish economy.
However, tourism doesn’t necessarily bring benefits to the hosting economy.
The Air B&B situation in Edinburgh has got so concerning that Edinburgh City Council have had to restrict the numbers of properties available for short term let due to concerns that many young people and young families cannot find suitable properties to rent on a long-term basis in the city. The situation in 2022 now is that most Airbnb-style lets in Edinburgh will require planning permission under plans approved by the city’s councillors. Scotland’s first short-term let ‘control zone’ means any property being wholly run for this purpose will need to apply for change of use.
The economic effects of a lack of affordable housing
The lack of affordable housing leads to people living in insecure, overcrowded and generally substandard accommodation. This can lead to energy and food insecurity and impact badly on a person’s physical and mental health. If there is no intervention from state agencies, such as social work or housing departments, homelessness can follow.
The lack of affordable housing prevents people moving to take up new employment opportunities in so called ‘hot’ markets. This in turn acts as a disincentive to potential employers as they realise that they will never fill their vacancies because they cannot recruit a local workforce.
Overcrowding in unsuitable damp properties can affect a child’s performance at school, lead to long-term physical and mental health issues. It can also reduce a worker’s productivity, therefore reducing their ability to earn enough money to improve their life chances and those of their children.
The lack of affordable housing affects whole communities and not just the people living in overcrowded, unsuitable accommodation. Through the creation of Community Action Plans, we have the opportunity to highlight the issue in our communities, placing it at the highest priority with our local council representatives and MSPs. Housing Trusts, controlled by local people, may improve the situation.
A realisation about the scale of the problem in Scotland and its economic effect on our communities will help local people in their fight for more of a say in local housing matters.
The Green New Deal
The Green New Deal originates as a response to our need as a nation to decarbonise our economy in response to the Climate Emergency. Advocates of the Green New Deal claim that improving the national housing stock by improving energy efficiency and insulation, will create new jobs across the country whilst improving the living conditions for tenants. Given that energy bills are predicted to top £3,000 this coming winter there is an argument that this would be a good investment of public money in both the short and longer terms.
The Scottish Government and local authorities have a major role to play in deciding where to spend the public money we have available to us and to provide better housing for those who need it, in the place where they it is needed. This is not an easy issue for any of the players involved. The problem is real and is affecting communities now, both physically and economically. It needs to be at the forefront of everyone’s mind as we head towards what might be another long, cold winter.
If you have been affected by any of the above issues…
Bylines Scotland would like to hear from you. This is a platform for citizens to tell their story about the issues affecting them in their daily lives. Contact [email protected] to develop this story with your experiences.