Last year, the Scottish Government released a discussion paper entitled “Housing beyond 2021”, the aim being to develop a vision for 2040 for the whole housing system and an accompanying routemap with key milestones along the way to achieving that vision.
The paper begins by recalling the Scottish Government’s housing and regeneration outcomes and these help to define some of the key themes explored in the paper.
Five of the key themes identified by the discussion paper are:
- Demographic change;
- Affordability and supply;
- Quality; and
- Fuel poverty.
Let’s look at current and future trends in relation to these five themes and then consider some of the key challenges and opportunities these pose for communications in the housing sector, both now and in the years ahead.
Scotland’s population is projected to age as it rises over the next 20+ years.
While forward projections up to 2041 forecast a net decline in the number of people in Scotland aged 0-24, 25-44 and 45-64, the number of people aged 65-74 is forecast to rise by 12.6% while the number of people in Scotland aged 75 and over is predicted to rise by 69.4% between 2019 and 2041.
This means that, while the overall population of Scotland is predicted to rise by 223,000 over that 22 year period, there will be almost 400,000 people aged 65 and older living in Scotland by 2041.
Size of households
At the same time, the average size of a household in Scotland is shrinking. It fell by 5% between 2001 and 2017. This decline can partly be attributed to a fragmentation of the traditional nuclear family and a corresponding rise in couples with children living apart and single parent households. But as life expectancy increases, we’re also seeing more people living independently for longer. If that trend continues into the future, this will create further pressures on the housing sector and even more demand for a greater supply of homes.
New housing supply
At the same time, there is a general consensus that we are not building enough homes in Scotland to meet even current demands. While the number of new homes being built has steadily increased over the past six years, rates of new house building are still a long way below the annual rates consistently recorded prior to the 2008 recession.
For instance, in 2017-18, 17,766 new homes were completed compared to around 25,000 units completed annually prior to 2008.
Levels of home ownership in Scotland have remained relatively constant over the past 15 years, fluctuating between 60 and 65% of all housing. We have seen a marginal decline in the percentage of the population in the social rented sector over that same period, down from 26% to 22%.
By far the biggest shift in tenures has been the percentage of the Scottish population living in the private rented sector. This has climbed from 6% in 2003 to 15% in 2017.
This is the phenomenon known as “generation rent”, the rise of the private sector being largely attributable to a younger generation who simply cannot afford to buy their own home.
The main, relatively blunt tool we have to measure the energy performance of Scotland’s housing stock in the Energy Performance Certificate which classifies homes according to a series of energy efficiency bands.
Specifically in relation to existing stock, a key focus for the Scottish Government has been to drive up the energy efficiency of the social rented sector. The Energy Efficiency Standard for Social Housing (EESSH) seeks to eliminate properties below Band D from the social rented sector by 2020.
There has been some progress since EESSH was first launched with the number of social sector homes falling below Band D falling from 66,000 in 2014 to 43,000 in 2017. However, although we are on the right path, the rate of progress will need to accelerate significantly for the 2020 target to be met.
Looking further ahead, the Scottish Government has already floated proposals for EESSH2 with the aim of maximising attainment of Band B in the social sector by 2032. Given that only 3% of social sector housing – and indeed all housing in Scotland – currently meets Band B or better, that longer term target is an extremely ambitious one.
The Scottish Housing Quality Standard (SHQS) was first introduce in 2004. According to the standard, housing stock should be energy efficient, be safe and secure, not be seriously damaged and be equipped with kitchens and bathrooms in good condition.
The SHQS was subsequently incorporated into the Scottish Social Housing Charter in April 2012 with the aim that all social housing stock should pass the standard by April 2015. Unfortunately, by the end of 2017-18, there were still 30,000 social rented properties that did not pass.
More widely, across all tenures, as of 2017, there were still almost 1 million properties in Scotland that failed to meet the standard. That provides a telling indication of how much more progress still needs to be made.
The number of households in fuel poverty has been declining in recent years. However, as of 2017, there were still 613,000 households across Scotland defined as being in fuel poverty including 174,000 in extreme fuel poverty.
The Fuel Poverty (Target, Definition and Strategy) (Scotland) Bill is currently passing through the Scottish Parliament and sets a headline target that no more than 5% of Scottish households should be in fuel poverty by 2040. This is a higher ambition than a target originally proposed that no more than 10% of Scottish households should be in fuel poverty by that date. Nonetheless, the policy continues to face criticism from campaigners who question why the target is not to completely eradicate fuel poverty in Scotland by 2040.
Housing communications: What are the future challenges and opportunities?
- The demographic challenge
An ageing population and fragmentation in the size of households pose significant duel challenges for the housing sectors, creating even more pressure to increase the supply of new housing while also creating new challenges around the changing type and mix of housing Scotland actually needs.
- The high expectations of policymakers
Whether in terms of combating climate change, making the transition to a low carbon economy, achieving greater energy efficiency or improving health outcomes, the housing sector is being challenged like never before and there is an expectation that housing across all tenures should be part of the solution in addressing each of these major policy issues.
This creates challenges around how to communicate with policymakers in a way that successfully manages their expectations as to what the housing sector can realistically achieve.
- Increasing costs of compliance
Connected to the challenge of managing expectations, as deadlines for meeting targets draw closer, the cost of bringing remaining housing stock up to the standard, be that in terms of energy efficiency or quality, inevitably creeps up, to the point where it may no longer be cost-effective to make those remaining properties compliant.
At the same time, as the Scottish Government’s discussion paper points out, 80% of the homes that will be in use in 2050 have already been built so there is a large onus on retrofitting those existing properties to be able to meet future targets. Yet the process of retrofitting existing properties is often that much more costly and challenging – and the challenges can be particularly great for properties located in more remote areas of the country.
- Measuring success
How we manage and measure compliance is also changing and there is a challenge around futureproofing against the introduction of future technologies and shifting or conflicting policy goals.
For instance, replacing inefficient electric storage heaters with efficient modern gas-fired boilers will undoubtedly have a positive impact on bringing down fuel bills, improving energy efficiency and tackling fuel poverty. But what about longer term goals around climate change and the transition to a low carbon economy with reduced reliance on fossil fuels? Moving to gas-fired boilers builds in an ongoing reliance on fossil fuels which potentially contradicts that longer term aspiration. This is just one example of how shifting technologies and policy priorities mean that the ways in which we measure success are also shifting.
- A successful cross tenure approach
Keeping in mind the projection that 80% of properties in use in 2050 have already been built, there is a realisation that improvements to the existing built environment will have to bear a major share of the burden when it comes to meeting future targets – and that needs to include all tenures of housing.
However, the Scottish Government inevitably tends to focus policy interventions on the social housing sector since this is an area where it can exert most direct influence. Even in the area of new housing, the Scottish Government has more direct influence over the supply of new social sector homes through its Affordable Housing Supply Programme than is the case for new private sector housing.
However, when it comes to the majority of existing housing that continue to be owner-occupied, policymakers have tended to rely on the carrot of incentives to drive positive consumer behaviour rather than the stick of legally binding targets – but with at best mixed success. For instance, the Green Deal pursued by the Conservative/Liberal Democrat UK Government coalition has limited success in encouraging owner occupiers to invest more in making their homes more energy efficient.
- Are public aspirations realistic?
A 2017 survey shows that 83% of the Scottish population aspired to be home owners, that 12% aspired to live in social rented accommodation and only 3% aspired to live in the private rented sector. Unfortunately, these aspirations don’t necessarily reflect the overall mix of housing currently available.
There is a challenge here to look at ways of making renting more attractive. But it also suggests that people tend not to think long-term when it comes to the type of housing they aspire to live in. We need to do more to encourage people to think about their future housing needs: i.e. what type of housing will they need when they become older and start to become less mobile, for instance? Encouraging people to think longer term about their own housing journey is also really important.
- The growing need for joined-up policymaking
We are seeing an increasing crossover between different policies in the housing sector. For instance, there is an obvious synergy between measures to improve energy efficiency and tackling fuel poverty.
Probably the biggest opportunity for policies to work together is the intersection between future housing, transport and energy policies. As homes become more self-reliant when it comes to generating energy and opportunities emerge through electrification of transport to transfer energy between your home and your car, so it will be increasingly important for the policy frameworks governing these different sectors to work in a coordinated fashion – and herein lies both an important opportunity and a key challenge for the future.
- New methods of communication
With new technologies, the changing way in which we communicate and consume information also creates new challenges for those working in the housing sector – whether that’s in terms of private housebuilders interacting with the house-buying public or social and private landlords interacting with their tenants. The expectations of housing consumers are rightfully increasing and those in the business of housing in all of its different forms need to adapt how they communicate accordingly.
Alex Bruce is a Director of Orbit Communications.