Minister for Communities
Stewart Maxwell
Scottish Parliament
June 21, 2007
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The prosperity of our nation rests on having a good supply of houses - whether for owner occupation, social renting or private sector renting - where people want to live and on terms they can afford.
A healthy housing supply forms the bedrock of fairer, stronger and safer communities.
The new Scottish Government is acutely aware of the difficulties many people face in achieving their basic housing aspirations. The challenges ahead are immense but this Government intends to tackle them.
First, the sobering reality is that there are simply not enough new houses being built. There are over 8,500 homeless households in temporary accommodation, plus unacceptably long waiting lists for affordable rented housing across Scotland.
This is set against a backdrop of property prices continuing to rise at an alarming rate, worsening the problem. This has serious consequences - not only for individuals and families, but for the Scottish economy as a whole. High rates of house price inflation limit labour mobility and reduce the competitiveness of our economy.
Secondly, the present arrangements for subsidising social housing are unsustainable. If we don't reform these arrangements, satisfying projected demand for social housing in future years will be impossible. It will require an astronomical injection of funding from the public purse - an increase on current spending levels of an additional £750 million over the next three years.
In 2002, the average subsidy paid for each house built for social renting was £52,000; this year it is £79,000 - an increase of 35 per cent above inflation. A lot more money spent but not necessarily a lot more houses delivered.
We need to find ways of getting much better value for the large sums of money we are spending on new housing and crucially, ensuring tenants get a fair deal for the rents they pay.
It is clear that this government has inherited from the previous administration very real problems in housing. Problems that have built up over many, many years.
Social Housing: public consultation
It's time to act and I want to work with those in the social housing sector to identify solutions that we can afford, that will work, and will be focused on delivering what tenants want.
More than that, I want to enable the sector to adapt to the challenges that it faces in a rapidly changing society.
Working with stakeholders in the coming weeks, we will develop proposals on getting better value and improving the deal for existing tenants and those in housing need. We will consult on these in the autumn and I hope that the consultation will enable people throughout Scotland to join the debate and offer their own ideas on how the sector should adapt and contribute to meeting our strategic objectives for Scotland.
And it's not just about bricks and mortar. It's about making informed decisions that chime with our wider goals to create a Scotland that's wealthier and fairer, healthier, safer and stronger, smarter and greener.
One of the burning questions in my mind is whether we are getting value for the huge sums of taxpayer's money ploughed into housing provision. The increasing cost of subsidy per house that I mentioned a moment ago suggests that we are not. We must get more housing for the public money we spend.
Housing Supply - The Task Force
I began by stating my view that, overall, housing supply in Scotland is insufficient. Therefore, I want to inform Parliament that I have published today the Government's initial analysis of the Scottish housing market - a report that highlights the recent unprecedented growth in Scottish house prices. Copies have been at the back of the Chamber since the report was published at 14.30.
For people looking to get onto the housing ladder for the first time AND for those trying to move up, higher house prices act as a serious barrier to their aspirations. The study finds that these problems are especially acute in parts of rural Scotland, and in Edinburgh and the Lothians where up to 30 per cent of working households are unable to afford the cheapest accommodation.
Of particular concern, the study shows that higher demand for housing is not being matched by an adequate supply response. Average house prices rose by 72 per cent between 2002 and 2006, but only 2 per cent more homes were built in 2006 than in 2002.
Put simply, not enough homes are being built to meet our needs. Increasing housing supply overall - and doing so in a way that creates vibrant, mixed communities that are environmentally sustainable - will be a major challenge; not just for the Government but for local authorities, housing providers and the construction industry.
Because of these entrenched longstanding problems with housing supply I have decided to establish and lead a Housing Supply Task Force to tackle the obstacles, such as land supply and planning issues, that have been hampering the delivery of more housing. It will challenge the way things are done - so that the homes we need are built where we need them.
The Task Force will have a wide membership - drawn from local authorities, house-builders, the housing association movement, and housing interest groups - people in a position to bring about real change. The task force will work to a clear remit that will drive forward a focused plan of action.
Scottish Housing Support Fund
I am also pleased to say that we intend to work to take forward the creation of a Scottish Housing Support Fund to provide additional help for the many people who struggle to afford a first home of their own.
We have already begun exploring options with the private sector and we know that the private sector is keen to invest more in housing, and regeneration, in Scotland. But we need to find new ways to make that happen.
We are committed to supporting first-time buyers through the new Fund but we are also looking at providing direct grants, and this will be considered in the context of the wider Spending Review.
The Right to Buy
The Right to Buy, it has been acknowledged, has been a popular route into home ownership for thousands of people over the years. We do not want to remove the rights of existing tenants but, as set out in our manifesto, we will be exploring ways of achieving greater local flexibility in the operation of the scheme. That is only right at a time when many areas are facing particular supply pressures.
Communities Scotland
I now wish to turn briefly to Communities Scotland. We want to consider how we can deliver our housing and regeneration commitments through a simpler public sector landscape and one which supports local delivery. I can confirm that we will arrive at firm conclusions over the next few months. As a result, there will be no major changes meantime.
I can also confirm to Parliament that I have written to staff today to explain my thinking for the Agency.
In conclusion, it is clear that change is needed if we are to respond to the housing needs of 21st century Scotland.
This Parliament has already shown its ability to work together to tackle important housing issues - not least the ambitious goal to provide homes for all unintentionally homeless people by 2012.
The adequacy of our housing supply and the sustainability of the way we fund our social housing are issues that are bigger than party politics. It is in all our interests, indeed it is our duty, to work together, in a spirit of cooperation, to end long waiting lists and bad housing. The people of Scotland deserve no less.