Housing Investment Taskforce minutes: September 2024

Items and actions

Paul McLennan MSP, Minister for Housing welcomed members to the third meeting of the Housing Investment Taskforce at Wheatley Group Offices in Edinburgh.

 

1. Evidence paper revised per member feedback and agreed.
2. Summary note of last meeting – agreed for publication.
3. Programme for Government 24/25 – highlighted as per the correspondence from the Minister to HIT members upon publication.
4. Workstream 1 – Housing Bill

 

Discussion on workstreams’ previously circulated paper on amendments to the Housing Bill.  This highlighted the uniformity of view from both private and public sector members, set in the context of both the housing emergency and the need to stimulate the private sector market. Group looked at two options:

1. Evaluating measures for rent control using CPI+1% as a metric with a ceiling of 6% for rents within rent control pressure zones on the basis of no intertenancy restrictions and these applying to the tenancy and not the property, in High Pressure Zones only and;
2. Exploratory discussions on the potential for support for exemption for Build to Rent (BtR).

Noted taking these options forward would provide a powerful message to investors that Scotland is open for business and the series of open and transparent group discussions were welcomed by the workstream.

Whilst Taskforce were broadly supportive of these options, in discussion the following points were raised:

• Potential impact on non-exempt areas including buy to let properties and concerns on the implementation of rent control pressure zones
• Need to carefully consider the definition of BtR and for this to be robust and suitable for urban and rural circumstances in Scotland
• MMR exemption being discussed elsewhere also supported
• Importance of investment beyond cities and examples of opportunities around SSEN proposals and Green Freeport – including the benefits and challenges of aggregation
• Non-financial incentives for BtR e.g. accelerated planning worth considering
• BtR sector as a catalyst for wider regeneration, its broader benefits and the desire of all to see development taken forward

 

5. Workstream 2 – Housing investment and potential for adopting good practice from beyond Scotland – presentation from Professor Kenneth Gibb.

Professor Gibb presented his draft report – a review of relevant national and international literature (both peer-reviewed and ‘grey’ reports) since the global financial crash. Explained that there is no ‘silver bullet’ but that there is a need to create an environment of long-term stability.  There are examples of successful approaches and different ways responding to challenges influenced by historical, institutional, local and national factors - these factors make certain solutions work in one place but, perhaps, less so in Scotland. These ideas could however be customised or have traction if aspects of our national arrangements were amended.

 Professor Gibb’s research focussed on four long term stable successful approaches:

• Austria – limited profit cost renting and its funding
• Finland – ARA guarantees and regulation
• Denmark - national solidarity revolving fund
• France – Livret A, national savings for social housing

His research highlighted implications for the Housing Investment Taskforce:

• A focus in the grey literature on the for-profit sector.
• Public Accounting definitions like the fiscal rules matter – UK is an outlier and political realities can change, consistency and the reversing of anti-investment bias in government is critical for affordable housing investment and long term stability.
• Blended subsidy across multi-level governance can work in federal systems and could do in devolved UK.
• Guarantees and soft loans.
• The challenge of balancing supply v demand subsidies.

 

6. General overview from individual workstreams

Noted work underway from the other five workstreams.

 

Next steps:

• Scottish Government to update members of developments on Housing Bill including draft amendments.
• Taskforce members to provide Professor Gibb’s with any comments on draft report and consider what should influence workstream actions.
• Potential benefit of social investment to be considered.