Housing Supply Task Force - Minutes of 5th Meeting 2009
Conference Room 3, Victoria Quay
Monday 16 November 2009
Members Present:
Alex Neil MSP, Minister for Housing and Communities
Councillor Harry McGuigan, CoSLA Spokesperson on Community Wellbeing and Safety
Jonathan Fair, Homes for Scotland
Kennedy Foster, Council of Mortgage Lenders
Brian Frater, Heads of Planning Scotland
Ritchie Johnson, Association of Local Authority Chief Housing Officers
Graeme Brown, Shelter Scotland
Ronnie Jacobs, Miller Homes
Brian Gegan, Scottish Federation of Housing Associations
Rachel Gwyon, Deputy Director, Housing Markets and Supply, Scottish Government
Ken Ross, Scottish Property Federation
In attendance:
Kathy Cameron, CoSLA
Jacqui Watt, Scottish Federation of Housing Associations
Sarah O'Neill, Consumer Focus Scotland
Alex Robertson, Housing Investment Division, Scottish Government
Jackie Wilkins, Housing Supply Unit, Scottish Government
Kathleen Marshall, Directorate for the Built Environment, Scottish Government
Apologies:
Jen Wallace, Consumer Focus Scotland
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 members to the meeting, including Sarah O'Neill, attending for Consumer Focus Scotland. He noted that this would be Brian Gegan's final meeting as he would be standing down as SFHA Chair in December and thanked him for his contribution to the group's work.
2) Minutes of the Previous Meeting
2. The minutes were agreed.
3) Update on the Scottish Housing Market
3. The Minister sought an update from Members' on recent developments in the housing market. Key points arising were that:
Finance
· CML has reduced its forecast for the number of repossessions in the UK this year to 48,000.
· Looking ahead, gross mortgage lending is likely to be £141billion this year and £150 billion next year. Net lending will be around £8 billion this year and £15 billion next year. A slow and protracted recovery in the market is anticipated.
· Some organisations have had full securitisation issues, suggesting there is some investor interest in housing.
New Development
· Recent commentary on house-prices had not captured the trends with regard to new build homes, where there has been a notable decline in prices - 20-25% falls from the Q3 2007 peak are not unusual.
· Developers are seeing a limited return to 95% loan to value products, but with strict credit scoring criteria which are very difficult to meet. First time buyers were still, in the main, being asked for 20-25% deposits.
· The average developer is operating at half previous housing activity levels, mainly due to the difficulty in securing finance. Demand was higher than could be met by supply.
· Local authorities were seeing an increase in planning application numbers in some areas.
· Scottish Government's official statistics for private new-build starts and completions seems more positive than those produced by the NHBC, even taking into account the fact that the NHBC doesn't cover all of the market. It would be important for developers to get an explanation of how the official statistics are calculated so as to get an understanding of why this might be the case.
Other Points
· Young people and others were facing limited options as a consequence of high Loan to Value ratio requirements for mortgages and a lack of available social rented accommodation.
· Local authorities were under pressure with existing resources to meet Scottish Government targets on housing, in particular the 2012 homelessness target.
· The demand for housing to meet the needs of an ageing population was becoming an increasing issue in all local authority areas.
Action
- Secretariat to update members at the next meeting of the Task Force on discussions between the Scottish Government and Homes for Scotland on innovative new supply models.
- Secretariat to arrange a meeting between Homes for Scotland, Scottish Property federation, CoSLA, ALACHO, HoPS and Scottish Government statisticians to discuss the collection and collation of official statistics.
- Secretariat to provide members with a brief on the Scottish Government's "Working Party on Older People" at the next meeting of the Task Force.
4) Housing and Planning delivery framework (geography of supply)
4. The Minister invited Jackie Wilkins to introduce her paper. The key elements of the framework set out in the paper were:
- This was a fundamental change developed jointly by the SG & CoSLA, bringing together housing and planning systems to help meet the national and local government ambition to increase housing supply over the long-term.
- The framework integrates two previously separate planning processes, (i) local housing strategy development; and (ii) land-use planning for housing. It requires much closer working between housing and planning professionals both within and across local authorities which are part of the same housing market partnership.
- The process was in its very early stage and would not be fully integrated and functional until around 12 - 18 months time.
- The biggest changes include a new requirement to address the issue of "demand" in addition to "need" in assessing housing requirements, the use of the Housing Need and Demand Assessment (HNDA) as a common evidence base for both Local Housing Strategies and Development Plans, the inclusion of housing supply targets covering all tenures in Local Housing Strategies and a requirement to allocate a "generous" supply of land in Development Plans to meet housing need and demand.
- Early evidence suggests that the system is beginning to bear fruit. Early HNDAs and Main Issues Reports received have factored in economic development ambitions as part of their assessment and demonstrated a commitment from local authorities to adopt the Scottish Government's policy aim to increase housing supply and provide a generous supply of land for housing.
5. During discussion, the new framework was widely welcomed as a positive step forward, balanced with recognition that we would not see the benefits for some time yet. Key points raised were that:
- The extent to which the private sector is being given an opportunity to engage with Housing Market Partnerships varies across the country.
- Consumers should be recognised as key stakeholders in the process - although it was noted that this could be difficult. The focal point of public engagement would be the Local Housing Strategy rather than the more technical HNDA.
· It is for local authorities to consider the appropriate stakeholder engagement when establishing their Housing Market Partnerships. Some of these partnerships straddled up to 8 local authorities and therefore already had very significant memberships.
· Where the Centre for Housing Markets and Analysis find an HNDA lacking in some particular detail, they will seek further clarification from the relevant local authority.
· Recognition that the calculation of demand is causing some level of difficulty; additional guidance is being considered for local authorities.
Action
- Jackie Wilkins to liaise with CoSLA and gather intelligence from local authorities on the level of engagement with the private sector in the new framework, discuss how to take this forward and report back to the next meeting of the Task Force in February.
5) Surplus Public Sector Land
6. The Minister invited Alex Robertson to introduce his paper on the availability of surplus public sector land in pressured housing market areas. The paper noted that, while surplus public sector land has made a significant contribution to meeting affordable housing need in recent years, there is now less land (owned by both Councils and other public bodies) available than might have been anticipated and the prospect of further reductions in future. Other key points in the paper were that:
· Some local authorities are considering purchasing land for their own house-building programme.
· Where land does become surplus in future, it is more likely to be difficult to develop, to be in the wrong place to meet affordable housing demands or small in scale.
· There will be a few strategic sites which are mainly in the ownership of the NHS, the MOD and Scottish Water.
· There is a wide variety of experience regarding the contribution that the supply of public sector land for residential development is making to affordable housing policies - and no consistent method of measuring the disposal of surplus public land and its impact on affordable housing policies.
· It would be valuable for Councils and other public bodies to have early conversations about the potential use of surplus land for affordable housing.
7. Further work would be undertaken in conjunction with local authorities and public sector organisations to discuss the availability of surplus sites and the monitoring and evaluation of their contribution to affordable housing policy.
8. In follow up discussion, Members welcomed the update on progress. Clarity was sought as to how the private sector engages with the Scottish Government on this issue and it was agreed that direct contact should be made with Alex Robertson.
6) Development & Infrastructure
9. The Minister invited Kathleen Marshall to introduce her paper, which reported on a number of work streams being taken forward following the working session held by the Scottish Government, COSLA, the Scottish Property Federation and Homes for Scotland on 12 August 2009. Key progress points were:
- Following public consultation earlier this year, revised guidance is in the process of being drafted on Planning Circular 12/1996 on planning agreements. An early draft of the circular has been shared with partners from the public and private sectors for comment.
- GVA Grimley had been appointed to undertake some evidence gathering on development and infrastructure provision across Scotland, which will assist in informing the work being progressed on brokerage
- Work has recently begun to explore how Compulsory Purchase Orders can be used more effectively as a tool to unblock land which can then be used for development. The Minister and Cabinet Secretary for Justice had written to the Scottish Law Commission asking them to consider the process for CPOs; this had been built into the Commission's work programme.
10. Ewan Cameron-Nielsen then provided a short update with regard to progress on funding models being explored, including the JESSICA programme and Tax Increment Financing.
11. Members welcome the updates in follow up discussion. In addition:
- It was confirmed that the Cabinet Secretary for Finance and Sustainable Growth leads on the infrastructure investment issue, with input from the Minister for Housing and Communities on housing issues.
- The Minister noted that City of Glasgow Council (and other local authorities) are considering their scope to invest in infrastructure up-front and then recover money from developers at a later point in the process.
Action
- Kathleen Marshall to consider how Housing Supply Task Force members can engage in the work being taken forward on development and infrastructure.
- Secretariat to provide a report for the next meeting of the Task Force on the work being done by City of Glasgow Council and other local authorities on infrastructure investment..
7) Future of the Task Force
12. The Minister thanked members for their input to the paper that had been circulated. A more detailed paper would be prepared for the next Task Force meeting setting out firm proposals for the future.
Next Meeting
13. The next meeting will take place on Tuesday 9 February 2010 (10.00 - 12.00) in conference room 2, Victoria Quay.
AOB
14. There was no further business.
HSTF Secretariat
November 2009