With the release last week (7th February) of the UK Government’s long awaited housing white paper, Scotland’s own problems in the area were propelled into the limelight. The simple fact is, not enough houses are being built to meet increasing and changing demand, making homeownership an unaffordable dream for many millennials.
‘Modular homes’ or ‘off-site’ construction could offer part of a solution to this crisis. The process of constructing ‘modules’ complete with everything from electrics to plumbing at a factory away from the development site has already been identified by the Scottish Government as a way of addressing the housing shortage.
The concept is widely used around the world to provide strong, energy efficient homes. Here in Angus, the first six houses of a new development on the site of the old Inverpark Hotel in Arbroath were built in complete units at a factory in Dunfermline before being delivered to the site last week.
It was Theresa May’s proclamation that the UK would take a different stance to homeownership, supporting long term renting as a viable alternative, which struck me. If she does indeed wish to move towards equal perceptions in Britain between renting and homeownership, then she must echo that sentiment in her policies.
Even if we increase the number of ‘modular’ homes and increase the levels of traditional house building to keep up with demand, the UK Government’s disastrous ‘tenant tax’, which comes into effect in April this year could undermine the entire effort.
The Government has decided that landlords, unlike every other business, will be taxed on their income rather than their profits. This tax raid will only succeed in driving up rent levels in order for landlords to meet their costs.
With saving for a deposit noted as one of the biggest hurdles to homeownership, how will tenants who rent a property ever be able to save up enough money when they are forced to pay sky-high rents by a Government policy that is, in reality, detrimental to the very people the recent white paper aims to help.
Similarly, if the government truly wishes to achieve parity of perception between renting and buying a house, making it a much clearer choice for people rather than something they have no choice on, they will require the investment of professional landlords and letting agents. Yet, the very tax changes being implemented will drive those same people out of the market and rob the country of that investment.
The UK Government has to make up its mind, is it trying to drive landlords out to increase the supply of housing available to buy, or does it need landlords to increase the supply of quality properties available to rent to achieve balance?
So whilst innovations such as modular housing can help supply at the edges, both the UK and Scottish governments must begin to make consistent policy decisions if we are to seriously tackle the country’s housing problems.