Blog: Caution will not deliver the homes Scotland desperately needs
Gillespie Macandrew’s housebuilding expert Harry Smith says now is not the time for Scotland’s housebuilders to be cautious.
Recent forecasts suggest that residents of Scotland’s cities should brace themselves for rising house prices unless we can quickly increase the number of new homes being built.
A report from consultancy JLL predicts that housebuilders in Scotland will adopt a positive but cautious approach towards development, due to uncertainty from Brexit and the possibility of a second independence referendum.
It should be noted that Scotland’s housebuilders remain confident about their business prospects and committed to development. The industry has shown that it is well prepared to handle political and economic uncertainty.
However this is not the time to be cautious.
Edinburgh boasts the highest net migration in Scotland. This is only set to increase, adding even more pressure on housing. Restricting the stock of new homes will inevitably lead to price increases for residents as demand outstrips supply.
The demand for property in the Capital is already causing prices to rise rapidly. The JLL study predicts that the city’s house prices could increase by 23.4% and private rents by 20% by 2021. In Glasgow, where property prices are lower, the report predicts a 5.4% rise in prices.
Easing pressure on housing stock will require Scotland to encourage development on a far more ambitious scale. The current Scottish Government consultation on planning is a good opportunity to pursue changes to the planning system which can ensure more certainty at local levels and reduce delays.
Ways to increase investment in housing should also be explored, as should innovative ways to maximise available land, particularly in city centres where demand is even more acute. The political and environmental sensitivities that constrain development and preserve the greenbelt around our major cities limits the ability to meet demand for homes, again contributing to higher prices.
Our housebuilders and planners need to ensure that our prized green spaces are treated with great care while also allowing for provision of much needed homes in both urban and rural settings.
With the right approach the sector and its partners can be encouraged to increase output even in times of uncertainty. However the new figures show just how important it is to prioritise a positive environment for housebuilders and take action now to avoid a price crunch for our residents.
- Harry Smith is head of housebuilder & construction at Gillespie Macandrew LLP