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House building in Scotland
25/09/2008
The UK Government is being urged to do more to help Scotland's house building industry following the publication of an Office of Fair Trading report on house-building in the UK.
Communities Minister Stewart Maxwell backed recommendations to increase consumer protection for those buying a new-build house and the introduction of an effective industry code of conduct.
He said:
"The OFT report recognises that house builders are operating in challenging economic conditions.
"The Scottish Government recognises that this has become a major issue, with serious implications for the industry's present and future capacity and our ambition to increase long-term housing supply in Scotland.
"We have taken decisive action, both to help mitigate the impacts of the credit crunch on developers and to lay the foundations for the house-building industry to bounce back in future.
"The acceleration of up to £100 million from the affordable housing investment programme for this year and next will speed up the supply of affordable housing, enable RSLs to acquire land to support future growth and purchase 'off the shelf' unsold properties from developers. And, in partnership with local government, our fundamental reform of the housing and planning framework will ensure that land is freed up more quickly to meet housing demand in future.
"This Government welcomes the OFT's recommendations on the need for enhanced consumer protection for those buying a new-build house and for quick implementation of an effective industry code of conduct."
Mr Maxwell also called for more action from the UK Government to help Scotland's hard-pressed house building industry.
"The UK Government holds the major levers that can address the lack of mortgage finance and consumer confidence that are at the root of the current downturn in house-building.
"I continue to urge them to take decisive action in support of the mortgage market and I look forward to a swift response to the Crosby Review when it reports."
The OFT's market study was launched in June 2007, with a main focus on examining the role of competition in the supply of new homes and the consumer issues surrounding the new build homebuying process. The Scottish Government has worked closely with the OFT during the development of the study.
On August 19, the First Minister announced a package of measures intended to help mitigate the impacts of changing economic circumstances on house-building. This included:
- Bringing forward up to £100 million of affordable housing investment to be spent this year and next, rather than 2010-11 as originally planned. Some £60 million will be committed from national government programmes and, in line with the Concordat, discussions are taking place on a further £40 million from local government
- Setting new criteria for housing associations to purchase unsold stock or land to deliver houses where they are needed, at best cost to the public purse
- Postponing the review of the system of developer contributions in Scotland, to avoid placing new burdens on development at this time
- The Affordable Housing Investment Programme is allocated mainly to RSLs (Registered Social Landlords). Approximately 70 per cent of the programme is spent on helping RSLs to meet demand for new social housing for rent, on average subsidising just over two-thirds of the construction costs of each new housing unit. This accelerated investment, made possible by a wider reallocation of capital spending, is included in the draft Scottish budget published on September 16.