Victoria Blair: Housing construction – the compelling case for more investment

Victoria Blair comments on the benefits of housing construction and the need for more investment in the sector.

On May 20, the homebuilding industry came together for the first time in over two years at the flagship Homes for Scotland luncheon. While providing an opportunity to network and celebrate the achievements of the winners, it also provided an opportunity for reflection.

As the housing construction sector works hard to recover from significant challenges stemming from the pandemic, it has never been more important to consider the social and economic benefits the industry brings to the Scotland.

Earlier this year, Homes for Scotland published a report on ‘The social and economic benefits of building homes in Scotland’.

The report underlines the important role of the sector as an employer.

There are many “direct” jobs, such as builders themselves, employing design, planning, finance, contracting, engineering and project management professionals, as well as a wide range of trades people.

This is in addition to ‘indirect’ jobs through the supply chain and ‘induced’ jobs, providing goods and services to homebuilders and their suppliers.

The report estimates that together these jobs add up to 79,200 jobs in Scotland, which equates to 3.5 jobs for every house built and around 3% of total employment in Scotland.

Another key theme is the importance of creating diverse and balanced communities and the value of providing affordable housing within mixed tenure developments to ensure that low income families do not suffer negative impact.

The report discusses the impact that poorly insulated, poorly heated and overcrowded homes can have on health. Modern residential developments now include open spaces, leisure facilities and cycle shops and the developments are located in areas where residents can easily access nearby walks and cycle paths. It is an important factor in improving physical and mental health.

In 2018/2019, £21.5m was invested in sports and leisure facilities and £6.9m in public open spaces through developer contributions paid through Section Planning Agreements 75.

The housing construction industry also has an important role to play in addressing climate change and reducing carbon emissions and is recognized for its commitment to doing so.

Homebuilders are increasingly integrating zero-emission heating systems and improved energy efficiency measures into new developments.

Brownfield reuse is essential for both the delivery of new homes and environmental sustainability, useful in areas where the supply of land that can be developed is limited. It is estimated that a fifth of housing built in 2019 was on brownfield sites.

Emerging policies will compel homebuilders to encourage more sustainable communities and healthier lifestyles, supporting 20-minute neighborhoods (the idea that daily needs are met within a 20-minute walk or bike ride) and reducing dependence on cars. Larger scale developments will be encouraged to incorporate new public and green transport links, and local jobs.

The report also recognizes the contribution made to the Scottish economy by the sector’s economic output. In 2018, it is estimated that £1.8bn was generated from house building, or 1.8% of Scottish output.

The acquisition of homes and the sale of new builds are estimated to generate around £21 million in LBTT, paid on the purchase of land and buildings in Scotland, and locally it is estimated that council tax generates almost £2.6 billion for the Scots. advice each year.

So while it is evident that the housing construction sector makes a significant contribution and brings many social and economic benefits to Scotland, the report also observes that the sector is hampered by the undersupply of housing – and if housing supply were increased to 25,000 homes being built per year, economic output would be £0.3 billion higher than in 2019, with an additional £52 million invested in local infrastructure.

There would also be significant social benefits through a greater supply of well-designed, energy-efficient homes, improving health and access to education.

These benefits cannot be ignored – and are particularly important as the country strives to overcome the challenges suffered as a result of the Covid-19 pandemic and achieve Scotland’s net zero targets.

In order to help homebuilders achieve this higher bid, we need support from the planning process (at national, strategic and local levels) when new policies and requirements are set.

All of this evidence of the benefits of housing construction establishes a clear and demonstrable case for investing in the sector.

The UK and Scottish governments must now take advantage of these opportunities.

Victoria Blair is Senior Counsel at Burness Paull

Comments are closed.