Policy initiatives such as the Scottish Government’s recently announced Town Center Empty Properties Fund are only scratching the surface of the housing sector’s problems and something more fundamental and longer-term is needed, according to a property company.
DJ Alexander Ltd believes that while the policies are to be commendable, they do not address the real issues of housing supply.
David Alexander, Managing Director of DJ Alexander Scotland, said: ‘While the Town Center Empty Properties Fund seems like a good idea for turning unused city properties into viable accommodation, it is only a £4million fund. of pounds creating 87 affordable homes. In the grand scheme of things, this is so small that it makes almost no sense when compared to the larger issues facing the real estate market. With the Scottish Government estimating that there are 27,000 long-term empty homes, it would take 310 years to convert each property with this level of funding.
“This latest announcement will create 37 converted homes in Glasgow; two in Inverness; six at Dalkeith; 19 in Kirkcaldy and a few others dotted around the country and while that may be welcome, it won’t make much of a difference.
He added: “Clearly the Town Center Empty Properties Fund is one of many policies aimed at increasing the amount of housing available in Scotland. However, the underlying problem is that new housing construction has been significantly below historic levels for nearly two decades and new private construction; the private rental sector; and social housing has struggled to meet demand for years. This has led to sharp price increases for landlords, rent increases in the private rental sector and longer waiting lists for social housing.
DJ Alexander said that while the supply of new homes in Scotland increased by 15% year-on-year in 2018-19, it remains 19% lower than in 2007-08. The decade before 2008-09, the number of new dwellings had exceeded 20,000 each year since 1995-96 (the earliest year for which data is available) and peaked at 28,486 in 2004-05 with steady annual numbers in the middle 20,000s, he added. Since then they have been below 20,000 and dropped to 14,940 in 2012-2013.
Mr Alexander explained: ‘This situation has built up over decades as successive Scottish governments have built insufficient social housing which, coupled with a marked decline in private housing construction over the past 20 years, has resulted in our current shortages. The recent embarrassing announcement that Ukrainian refugees will be housed on a ferry and two disused tower blocks highlights the severe housing shortage in Scotland when it is virtually impossible to find accommodation for less than 1,000 people.
According to the housing company, there are now only 1,000 more social housing units than 13 years ago, causing “a major problem” in the social housing sector. A waiting list of 132,000 people has built up for social housing, meaning this is a problem that will exist for decades, the company said.
Mr Alexander added: “If Scotland is to encourage immigration as part of its economic growth strategy, housing must be a central part of this policy. There is therefore an urgent need to significantly increase the volume of housing construction over the next five to ten years in order to fill the backlog of social housing, to ensure that there are enough well-located properties in the rental sector available for foreign workers, and a substantial flow of new homes for new and existing buyers on the market. We cannot let the current housing crisis continue.
“Since the latest data is all pre-pandemic, we can expect volumes to be even lower in recent years. This means that demand for homes to buy and rent will remain at its peak for some time to come. There was already a pent up demand due to insufficient supply over the previous decade and this has now erupted into the busiest market we have seen in our lifetime, both in the buy and sell markets. of the rental. Things will calm down but it will take time for supply to start filtering through and therefore reducing demand. More incentives for homebuilders, for landlords and investors, and more activity in social housing construction would all help to meet the growing demands of people in Scotland who need homes.