Rural and islands housing: action plan

Enabling the Delivery of More High-Quality Affordable Homes

Access to Land

Access to developable land, in the right places and at the right prices to support viable development, is fundamental to the delivery of our housing ambitions and programmes in remote, rural and island areas. It is important, however, that this is balanced with other key considerations such as the protection of our natural environment, including protection and restoration of peatland and other important habitats, as well as supporting traditional forms of living and other aspects of cultural identity such as Gaelic-speaking communities.

The Scottish Government is committed to improving the transparency of land ownership and to ensure land holdings deliver in the broader public interest as well as empowering communities to have more say in how land should be used.

In addition, the Scottish Land Commission is taking forward a range of important work to support land to come forward to community ownership, including through the Community Land Leadership Group and its collaboration with Crown Estates on the Community Land Accelerator Pilot.

The Scottish Government established five Regional Land Use Partnerships pilots aimed at facilitating collaboration between local and national government, communities, landowners, land managers and wider stakeholders. The pilots are working to develop locally appropriate approaches to developing Regional Land Use Frameworks by the end of 2023. These frameworks will seek to demonstrate how, by taking a natural capital approach, we can maximise the contribution that our land can make to addressing both regional priorities and national targets and ambitions, achieving net zero with a just transition.

The Role of Local Development Plans

Local Development Plans help deliver the strategic approach and policy objectives set out in National Planning Framework 4 including requirements for the identification of land for housing. National Planning Framework 4 includes Minimum All-Tenure Housing Land Requirements for each planning authority in Scotland. The Minimum All-Tenure Housing Land Requirement is the minimum amount of land, by reference to the number of housing units, that Local Development Plans are expected to provide across the planning authority area for a ten-year period. Local Development Plans are required to identify a Local Housing Land Requirement for the area which is expected to exceed the Minimum All-Tenure Housing Land Requirement set out in National Planning Framework 4.

The Local Development Plan must contain a spatial strategy that makes provision for housing in rural areas. It should actively promote sustainable living, taking account of the different needs of rural areas and their local communities, as well as different delivery challenges. The resource implications of the proposed pattern of development, including facilitating access to local community services and support for sustainable transport, should be understood and used to inform a rural approach to the concept of local living.

Action

We will work with stakeholders to monitor implementation of National Planning Framework 4 national planning policies through its accompanying Delivery Programme and reflect on the progress of new Local Development Plans as they are prepared, particularly how they respond to and align with policies in National Planning Framework 4.

Land for Housing

Through our engagement, stakeholders identified access to suitable land as one of the key challenges to the delivery of more homes. We also heard from community groups and development trusts that have been successful in accessing land and buildings through Community Asset Transfer as well as landowners seeking to engage with communities and others in the potential sale of land or looking to support opportunities for the delivery of affordable homes locally.

The Scottish Land Commission’s report The Role of Land in Enabling New Housing Supply in Rural Scotland noted that the interests of communities and landowners can often be more closely aligned than perhaps sometimes characterised. It also noted that improved communication and collaboration greatly improves the prospects of a transaction being concluded.

Mechanisms such as rural housing burdens, can also play a role in providing some assurance to landowners that any land which they do make available will be used for the long-term provision of affordable homes.

The availability of suitable land in the right locations is vital to enable the delivery of more homes where they are required. Considerable funding has been made available to support the delivery of affordable homes across rural Scotland and we continue to work with local authority partners and others to support delivery.

We recognise there is already a range of work and activity in place and we are keen to build on this. This will include working with public sector agencies to consider land and building assets they hold that may be appropriate for housing.

Where public organisations have land or housing they plan to divest themselves of, we would expect them to consider the role it may serve in meeting broader housing ambitions and to engage with local authorities or other relevant housing partners, in the first instance to discuss.

Action

We will engage with Scottish Government agencies and relevant Non-Departmental Public Bodies to identify any surplus land and building assets that may support affordable housing.

We know that in some areas, it can take time to identify and bring forward suitable land to deliver affordable housing, often requiring considerable resource and collaborative work across a range of diverse interests. We recognise that appropriate actions need to be identified and taken in a planned way, to enable a pipeline of suitable land, in the right place and at the right time, to support the delivery of the affordable homes required.

Through the Convention of the Highlands and Islands Working Group on Population, three Community Settlement Officers posts were created to focus on better understanding local population challenges, and developing solutions to address these. The Community Settlement Officers are employed by Argyll and Bute Council, Comhairle nan Eilean Siar, and the Highland Council.

In Highland, work has been carried out on an in-depth mapping exercise of potential plots of land identified by communities for development. Benefiting from strong local knowledge, the officer has been able to successfully develop positive engagement with the owners of private estates, public bodies, and community groups in the area, with all parties now considering their role in delivering housing projects to support the retention and attraction of people into the area. A cumulative area of 19.42 hectares has been identified for potential housing sites within Community Council Areas, of which a range of sites (12.36 hectares) are being taken forward for further development consideration.

Action

We will continue to support the Community Settlement Officers in 2023-24 and will undertake a review of the potential benefits of the approach in building partnerships between public, private and community sectors in identifying land for housing.

Where a local authority identifies specific constraints relating to the availability of suitable land to support the delivery of affordable homes, we will work collaboratively with them as well as landowners and other relevant stakeholders to identify additional land opportunities with the potential to support appropriate delivery.

Land Reform

Scotland has a proud history of land reform since the early days of devolution. The Bute House Agreement and Equality, Opportunity and Community: New Leadership, Fresh Start set out our commitment to the introduction of a further Land Reform Bill. We are committed to introducing land reform legislation to further improve transparency of land ownership, help ensure large scale land holdings deliver in the public interest and empower communities by providing more opportunities to own land and have more say in how land in their area is used.

The measures will support and encourage community engagement, transparency, and responsible land management, which will benefit local communities by empowering them to engage with local landowners, improving understanding, and encouraging responsible management practices. It will include new measures to regulate the market in large-scale landholdings, including the introduction of a Public Interest Test, and requirements for community bodies to receive prior notification of impending sales or transfers.

The Land Reform (Scotland) Act 2016 promotes responsible, diverse land ownership, and addresses issues of fairness, equality and social justice connected to ownership, access, and use of land, by placing a statutory duty on Ministers to prepare a Scottish Land Rights and Responsibilities Statement. The statement was first published in 2017 and revised in 2022, consisting of a Vision and seven Principles, which lay out how land can be responsibly managed to support a strong and dynamic relationship between Scotland’s land and its people. It sets out how we see the balance between the rights of landowners, managers, local communities, and society at large. The Scottish Land Rights and Responsibilities Statement 2022 included the addition of a principle which states that “Land ownership, management and use should deliver a wide range of social, environmental, economic and cultural benefits”.

Scottish Ministers have also published guidance on engaging communities in relation to decisions relating to land, a requirement under the Land Reform (Scotland) Act 2016, to support greater collaboration and engagement between those who make decisions about land and the local communities that are affected by those decisions.

The Land Reform (Scotland) Act 2016 also increased transparency of land ownership and control, by providing powers to introduce the Register of Persons Holding a Controlled Interest in Land, ensuring that communities, tenants, and landowners know and understand more about who controls land – including those from outside the UK.

The Land Reform (Scotland) Act 2003 first provided for the community right to buy, the legislative mechanism through which communities have a right to buy land. This was extended in 2016 for local, place-based communities, where it can further the achievement of sustainable development. Communities already have the right, under the Community Empowerment (Scotland) Act 2015 to register an interest in any type of land – urban or rural. If the land comes up for sale, they have first choice to buy the land.

Action

We will introduce land reform legislation to further improve transparency of land ownership, help ensure large scale land holdings deliver in the public interest and empower communities by providing more opportunities to own land and have more say in how land in their area is used.

Community Asset Transfer

The Community Empowerment (Scotland) Act 2015 introduced a right for community bodies to make requests to all local authorities, Scottish Ministers, and a range of public bodies for any land or buildings they consider they could make better use of. It gives community organisations new rights for their asset transfer application to be seen in set timescales and introduces a route of appeal to challenge negative decisions. And it places new responsibilities on public bodies to consider asset transfers not only for surplus buildings or land, but for all their estate.

Funding for asset transfer requests comes from a range of sources. Scottish Government provides funding to the Community Ownership Support Service to work with community organisations, and to work with the relevant authorities throughout the asset transfer process. Support provided to the Community Ownership Support Service is helping build community capacity, guiding and enabling local groups through the asset transfer process, and working with the relevant authorities to build knowledge and further embed the policy. Community Ownership Support Service has a dedicated adviser who covers the northern and western isles, and their services are free to access. Funding to support asset transfers can be applied for from the Scottish Land Fund.

Asset transfer can be used to support the delivery of affordable housing in rural and island areas where communities wish to progress and can demonstrate the associated community benefits and can therefore play a significant role in providing new opportunities for local people to continue living in their communities and contributing to the local economy and wellbeing. We recognise that engaging with the process, can sometimes be challenging for communities and we are working with communities and partner organisations to understand these challenges and better support our communities to achieve their ambitions.

We want to ensure organisations are compliant with community asset transfer procedures and community groups get a fair and transparent opportunity to put forward their plans. Our work with the National Asset Transfer Action Group and the ongoing review of the Community Empowerment (Scotland) Act 2015 will provide further opportunities for everyone to get involved.

Action

We will build upon community capacity and knowledge of the Asset Transfer process, working collaboratively with communities, relevant authorities, and our partners including the National Asset Transfer Action Group. We will do this by encouraging the sharing of good practices such as named point of contacts at relevant authorities, and promoting transparent processes that place community ambitions at their core.

Transport

The National Transport Strategy published in February 2020, sets out our vision for a ‘sustainable, inclusive, safe, and accessible transport system, helping deliver a healthier, fairer, and more prosperous Scotland for communities, businesses, and visitors’. The Second Strategic Transport Projects Review will inform the Scottish Government’s transport investment programme in Scotland over the next 20 years.

Of relevance to islands and peninsular communities, the Islands Connectivity Plan will replace the Ferries Plan and be broader in scope, considering aviation, ferries, and fixed links as well as onward and connecting travel. The Islands Connectivity Plan is being developed within the strategic context of the National Transport Strategy and the National Islands Plan. The intention is to develop a strategic Islands Connectivity Plan for all islands that will set a vision for Scottish ferries, outlining good practice and standards for delivery of ferry services.

The local living approach, embedded in the National Transport Strategy as well as a range of policy drivers and initiatives, including National Planning Framework 4, Local Development Plan guidance and regulations, and Housing to 2040, can help to achieve net zero by improving access to infrastructure, services, and employment, reducing reliance on private vehicles and in making our places more resilient to the impacts of climate change. The concept of local living can be applied in remote, rural or island areas to support improved climate resilience, better housing opportunities, modal shifts in transport, diversity in high streets and community wealth building.

Digital Connectivity

Our Housing to 2040 vision includes a focus on communities being digitally connected, enabling residents to work from home or hot desk locally when they need or want to. All new build homes delivered by local authorities and registered social landlords under the Affordable Housing Supply Programme are expected to be digitally enabled with connections required to utilise the best available technology and, where it is not possible for a gigabit capable technology to be provided immediately, the physical infrastructure should be installed to support retrospective deployment.

Digital connectivity is a key enabler of economic growth, both in terms of supporting businesses and those who may wish to live in rural and island communities whilst working remotely. The Reaching 100% programme (R100) supports the Scottish Government’s commitment to extend superfast broadband access to all premises across Scotland. It is working alongside ongoing commercial activity to deliver future-proofed connectivity throughout Scotland. By March 2028 we expect to have connected over 114,000 premises to superfast broadband through the R100 contracts with around 70% of those being in rural areas, 12,000 of which will be in island communities. As of 30 June 2023, over 30,000 properties now have access to superfast broadband following R100 activity.

The vast majority of R100 contract build will be fibre to the premises, capable of delivering gigabit connections of up to 1,000 megabits per second. The R100 contracts are central to delivering gigabit-capable broadband access to rural and island properties in Scotland.In delivering gigabit-capable connectivity, we are putting rural Scotland ahead of the curve, delivering connections over 30 times faster than the original superfast commitment (30 megabits per second).

During 2022, 16 subsea cables were deployed to 15 Scottish islands as part of the R100 Programme providing future-proofed, resilient connections to these communities for decades to come. Upon completion of build, over 12,000 island properties will have access to gigabit capable fibre to the premises connections.

A public review will confirm the eligibility of premises for potential future procurements associated with the UK Government’s Project Gigabit programme, using information provided by suppliers about their planned and completed gigabit-capable build. Throughout our continued close working, we will urge the UK Government to commit the level of funding required to deliver future-proofed connectivity across Scotland, leaving no-one behind.

Action

We will undertake a review of suppliers’ current and planned gigabit-capable build, including inviting views from wider stakeholders.

We will continue to engage closely with Building Digital UK as progress is made towards the launch of the first Project Gigabit procurements in Scotland, which we expect before the end of 2023.

In 2023, we will consult on changes to building standards which would require developers to deploy and optimise digital connectivity in all new housing developments.

Scottish Government Housing Programmes

The Scottish Government provides support to deliver homes in rural and island areas through a range of national programmes and interventions. Local authorities receive multi-year Resource Planning Assumptions through the Affordable Housing Supply Programme to enable them to forward-plan affordable housing delivery effectively. Priorities for housing investment over a five-year period are set out in local authority Strategic Housing Investment Plans and local authorities are expected to over-programme to allow for slippage across their programmes. We would also expect local authorities to continue to consider the inclusion of projects to meet priority housing requirements across all areas including remote, rural and island communities.

Affordable Housing Supply Programme

Between 2016-17 and 2022-23, the Affordable Housing Supply Programme, including the Rural and Islands Housing Fund has supported the delivery of over 10,000 affordable homes in remote, rural and island areas.

The Affordable Housing Supply Programme comprises a range of funding mechanisms to enable homes for social rent, mid-market rent, and low-cost home ownership across Scotland, supporting priorities set out in local authorities’ Local Housing Strategies and Strategic Housing Investment Plans. It has in place affordable housing investment benchmarks which recognise the additional cost of delivering homes in rural and island communities. The benchmark system is a flexible, administrative tool which is used for grant assessment purposes only – it is not a cap on required grant levels.

Brathwic Terrace – Isle of Arran, North Ayrshire

The Brathwic Terrace development at Brodick on the Isle of Arran completed in June 2022. This was the first council housing to be built on the island for more than 20 years. The project saw the addition of 34 new homes for social rent by North Ayrshire Council and comprises a mixture of general needs homes, amenity bungalows and wheelchair liveable homes. Scottish Government contributed grant funding of £2.38 million from the Affordable Housing Supply Programme. The properties were let through the North Ayrshire Housing Register which included the use of a Local Lettings Initiative for key workers specific to the island.

In addition to mainstream Affordable Housing Supply Programme funding for local authorities and registered social landlords, there are a number of other distinct programmes within the broader Affordable Housing Supply Programme.

Rural and Islands Housing Fund

In recognition of the differences in the housing system in rural and island areas of Scotland, the demand-led Rural and Islands Housing Fund has been operating since 2016-17 and is targeted at those unable to access the mainstream affordable housing programme such as communities, landowners and other eligible organisations. The fund has enabled local organisations to take a more active role in meeting the housing needs of their communities where they choose to do so and complements existing investment in affordable housing directed through registered social landlords and local authorities. The demand-led fund is now widely recognised as a route for the delivery of homes in some of the most remote communities. The Scottish Government is making up to £30 million available through the demand-led fund during the current parliamentary term. Interest in the fund remains high, with over £18 million allocated to projects as of August 2023 and a pipeline of projects being supported by feasibility funding, with the aim of progressing to the main fund.

Smaller Isles – Orkney

Since the Scottish Government’s Rural and Islands Housing Fund was launched in 2016-17 several projects have come forward from Development Trusts on Orkney’s smaller isles.

The Rural and Islands Housing Fund has provided almost £1 million towards the refurbishment of existing homes or other building, converting them into residential use in North Ronaldsay, Papa Westray, Shapinsay, Westray, Sanday and Stronsay. As at May 2023, five homes have been completed, and are tenanted, with a further five under construction. The homes are an important asset for these small, fragile island communities, helping to sustain or increase their island population. A number of the Development Trusts are now embarking on further affordable housing provision with additional projects coming forward in 2023 and onwards.

Affordable Home Ownership

We provide support for affordable home ownership for first-time buyers and priority groups who could not otherwise afford to buy on the open market through our Low-Cost Initiative for First-Time Buyers schemes which comprise the Open Market Shared Equity and the New Supply Shared Equity Schemes.

Between 2014 and 2022 1,486 homes were purchased through the Open Market Shared Equity scheme in remote, rural and island communities. Of these, 243 were in remote rural areas, 353 were in remote small towns and 890 were in accessible rural areas. Between 2017 and 2022, 250 homes were approved through other Low-Cost Initiative for First-Time Buyers schemes. Of these, 83 were completed during this period, 14 in remote small towns, 23 in accessible rural areas and 46 in remote rural areas.

Partnership Support for Regeneration

We also provide Partnership Support for Regeneration grants to private developers to build homes for sale in areas of demand with little or no new private housing delivery. Projects are required to meet the local strategic investment objectives of the area.

Self-Build Loan Fund

The Self-Build Loan Fund plays a vital role in contributing to the long-term sustainability of our rural and island communities and it has proven to be particularly successful in the Highlands and Islands. It is available to self-builders across all areas of Scotland who are unable to access standard bank lending and provides a loan of up to £175,000 to help finance the cost of development. The Fund was extended for up to five years in November 2022, with £6 million recyclable loan funding made available. Since 2016, a total of 61 loans have been offered including thirty in Highland Council area and ten in Comhairle nan Eilean Siar.

Self-Build Loan Fund – Mull

Gary and Susan in Mull decided to build their own home utilising support from the Self-Build Loan Fund.

With loans of up to £175,000, the Self-Build Loan Fund gave Gary and Susan the confidence and security to undertake the project. The couple, both retired, were able to use equity from their previous home to undertake the project. The Self-Build Loan fund provided a vital bridging loan allowing them to undertake the project quickly, given that there is a limited construction window in Mull due to weather conditions.

Having the bridging finance allowed them to hire local builders and contractors, secure in the knowledge that they could be paid. The couple received guidance and expertise from Communities Housing Trust.

Housing Infrastructure Fund

The Housing Infrastructure Fund is helping to support key strategic housing projects which have been blocked or unable to proceed due to the extent and costs of infrastructure works involved. The fund is prioritised to projects which support the delivery of affordable housing. The second round of the Housing Infrastructure Fund was launched in 2021 and will run to 31 March 2026 building on the success of round one which invested around £50 million loan and grant across urban and rural areas to fund infrastructure that will help unlock delivery of more homes.