Housing to 2040: island communities impact assessment

Step Two: gathering data and Identifying stakeholders

2.1      Data about the current situation in island communities

Two key sources of data have been gathered on the differences that occur in island communities, and between island groups, in contrast to mainland Scotland. Firstly, insights gathered from stakeholders and people living in island communities and secondly from published research and statistics.

Differences have been identified in:

• Housing supply, building costs and maintenance

• Fuel poverty
• Energy efficiency
• Short term lets and second homes
• Digital connectivity
• Wellbeing and community

2.2      Housing supply, building cost and maintenance

Responses to stakeholder engagement and consultation exercises between 2018 and 2020 emphasised that the availability of affordable homes in island communities was insufficient. This view was also reflected in responses to the consultation for the National Islands Plan.[i] Although current policy encouraging new and improved housing is seen as a positive step, respondents reported that the availability of affordable, fit-for-purpose housing on Scottish islands presents a challenge for island communities.

Access to housing affects population decline and influences the decisions of young people to leave or return to island communities. This in turn affects the sustainability of local services, especially schools. Lack of accessible and affordable housing was considered to be a barrier to attracting families to island communities. It is also associated with various manifestations of rural poverty and general inequality, including homelessness and hidden homelessness.

Consultation responses also indicated that the cost of building and maintaining a home on Scotland’s islands was higher than in more urban areas as economies of scale could not be replicated in rural and island areas. Housing construction on the  islands was often more complicated and difficult than in many mainland areas due to transportation costs and distances (adding upwards of 30-40 per cent on the price of building) with the level of complexity varying between islands. Issues such as the regularity and reliability of ferries, weather, availability of workforce and land for construction and accommodation for workforce were all outlined as additional contributing factors.

2.3      Fuel poverty

The cost of heating a home in the islands and other remote rural areas can be higher than in other parts of Scotland, due to a number of factors: lack of access to mains gas (currently the cheapest method of heating homes), the low thermal efficiency of many homes in remote rural Scotland, the climate, and in some cases, the tariff levels.[ii] This has led to higher levels of fuel poverty and extreme fuel poverty in all island containing local authorities, except North Ayrshire, compared with Scotland overall[iii], as shown in the table below.

Fig 1. Fuel poverty and extreme fuel poverty data in island local authorities 2017-19.

Local Authority	Fuel Poor	Extreme Fuel Poor
Argyll & Bute	32%	19%
Highland	33%	22%
Na h-Eileanan Siar	40%	24%
North Ayrshire	28%	10%
Orkney	31%	22%
Shetland	31%	22%
Scotland	24%	12%

Source: Scottish House Condition Survey 2017-2019

According to the Scottish House Condition Survey published in 2020, between 2018 and 2019, rates of fuel poverty increased in remote rural areas (from 33% to 43%), increasing the gap when comparing overall rates of fuel poverty in urban areas (24%) to overall rates in rural areas (29%). Similarly, levels of extreme fuel poverty increased in remote rural areas (from 23% to 33%), meaning that extreme fuel poverty rates in rural areas (19%) were higher than in urban areas (11%).[iv]

2.4      Energy efficiency

The average energy efficiency profile of rural properties is lower than that for urban properties. Under SAP 2012, the mean rating is 66.7 for dwellings in urban areas, compared to 56.2 for dwellings in rural areas.[v] Factors such as the age of construction, the dwelling type, the heating and hot water systems in use and the extent to which the building fabric is insulated, all affect energy efficiency, and  dwelling characteristics associated with lower energy efficiency are disproportionately represented in rural areas.

The Scottish House Condition Survey measures the percentage of dwellings in the lowest energy efficiency Bands F or G by local authority, compared to the Scotland average. In 2017-19, 4% of all dwellings in Scotland were in Bands F or G. Island and rural local authorities generally had much higher proportions of dwellings in the lowest energy efficiency bands. For example, Na h-Eileanan Siar (18%), Orkney Islands (17%), Dumfries & Galloway (15%) and Shetland Islands (14%) recorded the four highest proportion of dwellings in Bands F and G. These local authorities also had the lowest proportions of properties in the highest efficiency bands.[vi]

In terms of Environmental Impact Rating (EIR), which represents the environmental impact of a dwelling in terms of carbon emissions associated with fuels used for heating, hot water, lighting and ventilation, rural dwellings have overall lower environmental impact ratings compared to other dwellings. This is because oil heating systems and houses are more common in rural areas, leading to lower overall environmental impact ratings for rural dwellings.[vii]

Island communities face unique challenges, including energy and supply chain constraints and costs, and a number of island communities are not connected to mainland energy grids, leading to challenges in reducing emissions.

2.5      Short-term lets and second homes

Second homes and short-term lets bring benefits to those who own them and the tourism businesses they support. But we know that, in some communities, these kinds of ownership patterns impact on the availability of homes to meet local needs and on community sustainability.

In certain island areas, particularly tourist hot spots, high numbers of short-term lets and second homes can make it harder for people to find homes to live in.

We have limited data at present on short-term let numbers by island, and the data we have relates only to Airbnb accommodation.[viii] Our proposals for a licensing scheme[ix] will help to ensure the safety of guests and local residents across Scotland, as well as give local authorities the powers to respond flexibly to local needs.  Additionally the licensing scheme will provide clear data on the exact number, type, and location of every short-term let across Scotland. However, even from the limited data available, it is clear that the intensity of activity varies significantly from island to island.

Local authorities will also be able to establish control areas covering all or part of their area in which planning permission would always be required for a change of use from a dwellinghouse to secondary letting (a whole property short-term let). For more information, please see the ICIA completed for the short-term let legislation.[x]

According to 2019 council tax figures[xi], there were approximately 24,000 second homes in Scotland, which equates to 0.9% of all dwellings in Scotland. Of those, approximately 10,000 were located within island local authorities.

2.6      Digital

Digital connectivity is an important driver of economic and social benefits. It can allow people to work effectively from home, support children in their learning, help people to stay connected to friends and family and allow people to participate in a wide range of cultural activities. It is also an important enabler for technology-enabled care, a key dimension of supporting independent living.

Access to the internet has been improving for all areas across Scotland.

The coverage of superfast broadband (minimum download speed of at least 30 Mbit/s) to residential homes across Scotland stands at 94% in 2020, however there is a significant difference between availability in urban and rural areas of Scotland. Of residential premises in urban areas, 98% have access to superfast broadband, compared with 72% in rural areas.[xii]

Local authorities in the Highlands and Islands of Scotland have seen some of the largest increases in superfast broadband availability in the UK in recent years. However, around a third of premises in areas such as Orkney remain unable to access superfast speeds. The table below shows the proportion of premises that can access fixed broadband speeds of at least 30 Mbit/s in selected Scottish island local authority areas.

Fig 3. Proportion of premises accessing fixed broadband of at least 30 Mbit/s.

Superfast residential broadband coverage by selected Scottish local authority area	% of premises ≥ 30Mbit/s
Argyll and Bute	79%
Na H-eileanan Siar	75%
Highland	81%
Orkney Islands	64%
Shetland Islands	70%

  Source: Ofcom analysis of operator data

Mobile services can also be used to access the internet. Coverage of Scotland’s landmass remains patchy, especially in rural areas. 4G geographic coverage from all operators now stands at 44% but this rises to 81% when considering coverage from at least one operator. This leaves 19% of Scotland without good 4G coverage from any operator, predominately in rural areas (so called ‘not spots’).

2.7      Community and wellbeing

A study looking at Scotland’s social capital[xiii] (the social connections that contribute to quality of life, health, safety and wellbeing in the neighbourhoods where people live) in 2019 found that overall, people living in rural[xiv] areas are more likely to report higher than average levels of social capital across most of the social capital measures, often significantly higher than the Scotland average.

There are large variations in measures of social capital within and between different geographies, including local authority areas, areas of higher deprivation, and urban and rural areas. The table below shows that residents of some island local authorities rate their neighbourhood significantly more positively than the Scotland average, but conversely, some rural and island residents report higher levels of loneliness.[xv]