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17/06/2020

Scotland’s speculative development model is ‘not delivering the homes needed'

Words: Laura Edgar
Housing delivery / Shutterstock_6835834

The Scottish Land Commission has argued that the country’s reliance on the speculative private development model to deliver homes will not achieve the level required to meet demand. 

Instead, the system needs a “fundamental reform”. 

In its Land Focus paper, published alongside a series of reports about land for housing, the commission says that land must be used more effectively to benefit everyone who lives in Scotland.

The paper considers issues such as the relationship between land prices and house prices, land banking and speculative housebuilding. Three research reports examine different aspects of the system. 

The University of Reading’s study looks at the relationship between residential development land prices and house prices, which it finds is not straightforward. The price of development land can influence the price of new-build housing.

An investigation by ChamberlainWalker Economics into land banking found no evidence of developers land banking sites with planning permission, but it did argue that there is a need for greater clarity on who holds options to develop land across Scotland.

On its own research, the commission said the most significant finding is that the speculative private development model “is not well suited to increasing the supply of new homes, especially in rural Scotland”. Here, development costs tend to be higher. Also, it is not suitable in parts of urban Scotland where market demand is lower and land may need to be remediated, according to the commission.

Housing supply in Scotland has increased since the 2007/2008 recession, but the level is not as high as before the recession. The paper notes that since then, the gulf between the housing “haves” – older homeowners – and “have-nots” – younger people living in private rent homes – has grown. 

Concerns about the affordability of housing were present before the current Covid-19 pandemic, but Shona Glenn, head of policy at the Scottish Land Commission, said the crisis has brought into “sharp focus a number of issues with profound consequences for human wellbeing”, such as access to green space and community facilities, and overcrowding.

“Market forces alone cannot and will not deliver the high-quality places that are so fundamental to human wellbeing because what is economically rational does not necessarily best serve the public interest.

“If Scotland is serious about delivering more homes and better communities, we need to look at how we can get a more diverse range of organisations involved in delivering housing in Scotland.”

This, she explained, does not mean a reduced role for private enterprise, but rather the public sector should adopt a “more proactive approach and a greater willingness to share in the risks and rewards of development, so that land can be used to benefit all of Scotland’s people”.

The next phase of the commission’s review will see it work with stakeholders across all sectors, including housing developers, to shape recommendations for how land reform can help to deliver more homes and better places and help Scotland recover to a more resilient economy, she added. It would also identify what new delivery models might look like.

The last in the series of the reports, which was published by the commission, looks at the benefits of getting communities involved earlier in plans for development earlier to produce better places.


Read more:

Land Focus (pdf) by the Scottish Land Commission

Residential Development Land Prices and House Prices (pdf) by the University of Reading

An Investigation into Land Banking in Scotland (pdf) by ChamberlainWalker Economics

The Value of Early Engagement in Planning (pdf) by the Scottish Land Commission


Image credit | Shutterstock

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