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Scottish Budget must take steps to tackle the housing emergency

David J Alexander

Next weeks’ Scottish Budget offers a real opportunity to tackle the housing emergency facing the country. With more than £3 billion of additional funding from Westminster there is sufficient money to address some of the major issues currently facing Scottish homeowners, property investors, housebuilders, and tenants.

Firstly, providing a boost to the housebuilding sector and property investors would go some way to delivering the extra homes that are so urgently required across Scotland. This, coupled with a substantial boost to the social housing sector would immediately start to tackle the enormous demand for more homes.

The latest newbuild figures show just how much housebuilding needs to be encouraged if the housing emergency – which has now been declared across 13 councils – is to be addressed. The number of all sector newbuild starts in Scotland has fallen by 4,745 (-22.4 per cent) from 21,190 to 16,445, which is the lowest figure since 2013.

Private sector newbuilds are down 3,290 (-20.1 per cent) falling from 16,387 in 2022 to 13,097 the following year, which is the lowest figure since 2020 when Covid severely impacted the sector. The picture for social housing sector is worse with a fall of 1,595 (-31.8 per cent) dropping from 5,022 in 2022 to 3,427 in 2023, which is the lowest number of social sector starts in a year since 2012.

Ensuring planning is made easier, encouraging greater property investment, and freeing up more areas for development are all crucial if Scotland’s housebuilding sector is to grow and produce the homes required over the next decade

There is also an immediate need for clarity on the future policy on rents in the private rented sector (PRS). Uncertainty has resulted in stalled investment in the sector and this needs to be addressed immediately if the enormous demand currently being experienced in the sector is to be met. A major revision of the Housing Scotland bill is required or perhaps even scrapping it altogether.

A revision of the land and buildings transaction tax (LBTT) would ensure that Scottish homebuyers had a level playing field with their southern counterparts. There is little sense in having such a wide disparity between homebuyers on each side of the border and equalising the rates for the whole of the UK makes sense for individual buyers and for companies and individuals considering investing and moving to Scotland.

In particular, first-time buyers need to be encouraged by levelling the rate of LBTT with the rest of the UK to stimulate the housing market from the bottom up.

Obviously, there are many competing demands for funds in Scotland, but housing is such a fundamental issue at present that it would be wrong if there was no focus on it in the forthcoming Budget. A real opportunity exists to start to address the major issues facing the housing sector in Scotland and if nothing is done then voters may be unforgiving at the next election.

Some serious financial commitments now would show a level of intent and purpose which has been lacking in recent years and I would hope that this is enacted when Finance Minister Shona Robison stands up in the Holyrood parliament next Wednesday to deliver her Budget speech.

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