Housing Supply Task Force - Minutes of 2nd Meeting 2009
Conference Room 12, Victoria Quay
Monday 11 May 2009
Present:
Alex Neil MSP, Minister for Housing and Communities
Councillor Harry McGuigan, CoSLA Spokesperson for Community Well-being and Safety
Jonathan Fair, Chief Executive, Homes for Scotland
Brian Gegan, Chair, Scottish Federation of Housing Associations
Ronnie Jacobs, Regional Director, Miller Homes
Graeme Brown, Director of Shelter Scotland
Kennedy Foster, Council for Mortgage Lenders
Ken Ross, Chairman, Scottish Property Federation
Brian Frater, Scottish Society of Directors of Planning
Ritchie Johnson, Association of Local Authority Chief Housing Officers
In attendance:
Caroline Johnson, CoSLA
Jen Wallace, Consumer Focus Scotland
Apologies:
Martyn Evans, Consumer Focus Scotland
Owen Kelly, Scottish Financial Enterprise
HSTF Secretariat:
Ewan Cameron-Nielsen, Housing Markets and Supply, Scottish Government
Ian Fairweather, Housing Markets and Supply, Scottish Government
1) Welcome and Introductions
1. The Minister welcomed everyone to the meeting, and in particular extended a welcome to the two new members, Brian Frater, Scottish Society of Directors of Planning and Ritchie Johnson, Association of Local Authority Chief Housing officers. Jen Wallace attended in place of Martyn Evans.
2) Minutes of the Previous Meeting
2. The minutes were agreed subject to one minor drafting change.
3) Current State of Housing Market
3. The Minister then invited members to set out their perspective on the current state of the market. The main points arising were: -
- For the first time in 9 months house builders were seeing an increase in visits to sales offices, although the level of registrations and completions continued to decline.
- Some developers are beginning to think about commencing new developments, but lenders were only willing to provide support in prime areas.
- The level of transactions continues to be lower than in the recent past - there were 700,000 transactions in 2008, compared to 1.4 million in "normal" years.
- 7-8 major lenders were pumping volume into the mortgage market, however there was still a lack of wholesale funding.
- Shared equity and part exchange is forming the major part of developer activity at preset, tie-ing up capital and impacting on balance sheets.
- Some lenders are supporting Scottish and UK Government shared equity schemes, but not those run by private builders. Others are still insisting on 5% deposits from purchasers of shared equity properties.
- New mortgage securitisation initiatives were pending under the UK Government's new scheme.
- Housing Associations were still finding it difficult to secure finance consistent with their business plans, and existing finance was being re-negotiated at more stringent conditions.
- Councillors are concerned about people over-stretching themselves to get a deposit and then being unable to afford their mortgage costs; not enough decent homes are available to help those people who might be at risk of losing their homes.
4. With regard to the Scottish Government's recent extension of the Open Market Shared Equity scheme, the Minister confirmed that 2 areas of Scotland had already used up their entire allocation. It was also confirmed that HAG subsidy rates would remain at their current level until the end of 2009.
4) Infrastructure Investment Paper
5. The Task Force considered the report prepared by Jonathan Fair in collaboration with other Task Force members and the Secretariat. The report was generally welcomed and the Task Force reached conclusions on short, medium and long term options which would be worthy of further exploration. It was agreed that the best way to take this work forward was to prepare a detailed action plan setting out actions, any relevant leads, timescales and financial considerations The action plan would take account of other ongoing work, including an event on infrastructure investment being planned by the SPF, CoSLA and the Scottish Government. It would also recognise that the issue is not just about the funding of infrastructure, but also its delivery.
Action
Jonathan Fair with assistance from Secretariat, and others to lead on developing a detailed action plan in relation to the infrastructure investment issue.
Secretariat to prepare and circulate to members a briefing paper on the current status of Scottish Government consideration regarding the JESSICA and JEREMIE programmes.
Secretariat to liaise with Private Office to ensure that invitations are provided for Task Force members for the planned event in September (2015 Awayday) looking at future housing supply in Scotland.
Secretariat to clarify the scope of the recent Scottish Water announcement and circulate this around members.
5) Land Supply
6. It was agreed to defer discussion on this issue until the next meeting to allow for more time for a meaningful discussion. It was also agreed that issues around the valuation of land for affordable housing should be discussed outside of the Task Force, with a specific meeting set up for this.
Action
Secretariat to seek to arrange a meeting between the Minister, HfS, SFHA, CoSLA, and SPF, to discuss issues surrounding the valuation of land for affordable housing.
6) New Building Standards regulations
7. The Task Force was provided with a presentation from the Scottish Building Standards Association (SBSA) setting out the main objectives of proposed new Scottish building standards regulations for domestic properties, which would come into force in October 2010. A consultation had already taken place on three issues and there are plans to consult on a further three, relating to energy, structure and compliance issues. Of the various review topics, proposals in relation to noise and energy use have the potential to result in the greatest additional cost to development.
8. The following key points were raised in subsequent discussion:
- Both HfS & SPF are fully signed up to the Sullivan Review.
- Developers have already reduced carbon emissions on new build since 1990, by 60%.
- Studies suggest that there is a 20 - 40 year payback on capital cost as a result of new requirements.
- It was likely that the cost to the public purse of the new requirements for the Affordable Housing Investment Programme could be up to £20m.
- Analysis undertaken suggests that the new standards might have a significant negative impact on land values, particularly in urban areas where there would be a high level of flatted developments
- Alongside consideration of standards for new buildings, it would be important to consider how the e.g., energy performance of existing stock could be improved.
9. Concern was also raised over the timescale for implementing the new arrangements, particularly in light of the uncertainty over when the housing market might improve. There was also concern about the fact that some Local Authorities place additional requirements through the planning system over and above those set out in national building standards. A question mark was also raised over the implications of revised standards for Housing for Variable.
Action
Secretariat to draft a letter for the Minister to send to the Minister for Transport, Infrastructure and Climate Change, setting out Task Force views on building standards.
Jonathan Fair to write to the Minister for Transport, Infrastructure and Climate Change requesting a meeting to discuss the timing of the new building standards regulations.
Secretariat to speak to SBSA to check that consultation responses to the recent consultation on building standards regulations are on the SG website and circulate to members if so.
Secretariat to arrange for the figures set out by Jonathan Fair on the costs of tightened e.g. energy and noise standards to be circulated to members alongside the approved minutes.
7) AOB
10. A request was made that Housing for Varying Needs should also be addressed in any future discussions on housing standards.
8) Date of Next Meeting
11. The dates of the remaining meetings for 2009 were set out. They are: -
· Tuesday 30 June.
· Monday 14 September.
· Monday 16 November.
12. The agenda items for the next meeting were to be:
- Action plan on funding of infrastructure.
- Land Supply.
- Review of Private Rented Sector.
- Any other relevant updates.
Action
Secretariat to circulate finalised and agreed minutes to the Minister for Transport, Infrastructure and Climate Change.
HSTF Secretariat
June 2009