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Brian Donnelly: John Swinney faces revolt over Scottish housing law

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A First Minister resigned and a new one was crowned in a turbulent month. Covering the shockwave of stories brought a sense of potential for change and a new direction, but while the first step towards positive action on housing was welcomed, it was also greeted with caution.

John Swinney, First Minister, faces a revolt from housebuilders over plans they claim will not help Scotland housing difficulties.  

David Melhuish, director of Scottish Property Federation, whose membership includes property owners, developers, funders, agents and advisers, said that the announcement “needs to be followed-up with immediate action to prevent the damage that the current Scottish Housing Bill is doing to much-needed new investment in new rental housing”.

'The real estate sector is ready to make significant investments into Scottish housing but we risk losing £3.2bn of direct housing investment, including over 20,000 new rental homes, and some £4.5bn of economic value to Scotland if the Bill persists in its current form.'‘The real estate sector is ready to make significant investments into Scottish housing but we risk losing £3.2bn of direct housing investment, including over 20,000 new rental homes, and some £4.5bn of economic value to Scotland if the Bill persists in its current form.’ (Image: Getty Images)

He said: “Rent controls have not have been successful in other European countries as they deter investment in housing, and the form they are currently proposed to take will exacerbate and not address Scotland’s housing emergency.”

He also upped the costing: “This is too big a challenge for the public sector alone to address. The real estate sector is ready to make significant investments into Scottish housing but we risk losing £3.2bn of direct housing investment, including over 20,000 new rental homes, and some £4.5bn of economic value to Scotland if the Bill persists in its current form. We look forward to continuing to work with the Scottish Government to tackle what is now accepted as a national emergency.”

Earlier, a senior industry figure said the housebuilding law risks the very viability of the sector in Scotland.

The leading housebuilder warned that meeting deadlines in heating and Passivhaus standards are expected to be hampered by supply shortages.

Industry body Homes for Scotland, which this month welcomed the Scottish Government’s move to recognise housing as a National Outcome, has raised concerns over Passivhaus standards which have a 2025 deadline for being introduced. This could push a house’s price up by £20,000.


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Looking at ways Holyrood could move to ease the housing crisis in Scotland, Innes Smith, chief executive of Elgin-based Springfield Properties, told The Herald: “Springfield has already delivered over 60 developments without gas across Scotland, however, we are concerned about the supply of air-source technology when every housebuilder across the industry begins delivering developments with air-source heating.

“We foresee a shortage of heat pumps coming down the track and this will drive price hikes as demand outstrips supply.”

He added: “Put simply, if build costs continue to rise, developments of any tenure will become unviable, and potential investment in Scottish communities will be lost.”

Jon Bootland, chief executive of the Passivhaus Trust, said: “We urge the Scottish Government to hold its nerve and not abandon this ground-breaking policy.

“A Scottish Passivhaus equivalent would deliver so many benefits to the people of Scotland in terms of radically reduced energy bills, improved health outcomes, and improved grid capacity through reduced peak demand.”

A government spokesperson said: “We are currently considering the responses to our consultation on a Heat in Buildings Bill.

“We also intend to consult on proposals for a Scottish equivalent to the Passivhaus standard in late summer, to support our commitment to parliament to confirm changes to building regulations in December this year.

“Our Heat in Buildings Supply Chain Delivery Plan sets out how supply chains will need to grow.”

Operators said the so-called exemption is itself a red-tape minefield few could be expected to negotiate.Operators said the so-called exemption is itself a red-tape minefield few could be expected to negotiate. (Image: Getty Images)

Also this month, my Business Week column focused on a reworking of Scotland’s short-term lets law that came under fire as details of its remit were quietly published.

It includes a move to allow some short-term holiday lets operators “exemption” from having a licence under the new regulations for up to six weeks a year.

However, operators said the so-called exemption is itself a red-tape minefield few could be expected to negotiate.

This move, earlier exclusively revealed in The Herald, to bring temporary exemptions for short-term lets licences to help tackle a shortage of holiday or festival accommodation in places like the Scottish capital.

There is also a proposal to go through the Scottish Parliament to allow licences to be transferred to a new host when accommodation is sold.

It also suggests prospective hosts building a new short-term let could apply for a provisional licence before construction is complete.

The scheme, aimed at helping tackle issues around housing pressures and antisocial behaviour, has been heavily criticised in the tourism industry.

The Scottish Tourism Alliance said around 10 per cent of such holiday accommodation had been lost as a result of the rules many say are too costly and complicated.

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