Rural voice 'not being heard' in Scotland's housing crisis

House builders now face a 30% premium to take forward projects in the Highlands and Islands - even more in some areas - and the area is in the grip of a construction crisis driven by Brexit.

In Wester Ross 128 projects are being taken forward by the community housing trust and council.

Each of these small developments will provide vital accommodation for workers and locals who might ultimately be forced to leave without it, leaving already fragile communities at further risk of depopulation.

However, many of those projects have stalled due to rising costs and a lack of trades people.

Most house builders, both large and SME a (small and medium-sized enterprises) are based in urban areas and may not be able to accommodate workers in remote areas.

Major house builders are largely based in urban areas (Image: Homes for Scotland)

Map showing the geographical spread of SME house builders (Image: Homes for Scotland)

The fact that Wester Ross is a highly sought-after tourist destination adds to the challenge.

"In 2007, self-build was the biggest housing developer in Highland," says Mr MacRae, who is Chief Executive of the Inverness-based Communities Housing Trust. "It was largely a rural thing.

"Back then, there was something like 1800 completions and of them over 1000 was self-build.

'The rural voice is not being heard' Ronnie MacRae, Chief Executive of the Community Housing Trust (Image: Community Housing Trust)

"It would have been a couple of houses in Gairloch, a couple in Durness, a couple in Tongue. Before you know it you've got thousands.

"Three years later that had dropped hugely - I think there was something like 900 completions.

"The lenders stopped lending for self-build and there wasn't the grant funding available at the time so housing associations and councils wouldn't build anywhere - urban or rural.

"We used to have a construction sector, what we didn't have was the funding packages to utilise it. The irony is now we've got the funding but we don't have the people to do it."

He says the need for housing in the Highlands and Islands hasn't changed but areas are facing completely different challenges.

"Communities used to say we need housing for our locals and that's it, nobody else," he said. 

"People now want housing to support their local businesses, housing to keep our school open, housing to attract people because we've got nobody to sit on our community councils or board and nobody to do this job or that job.

"I think depopulation has probably taken over as the main priority."

He mentions one project that is nearing completion in Raasay on Skye but says cost increases have made it increasingly difficult for housing trusts, councils and construction firms to take forward affordable housing projects.

Highland Council has declared a housing challenge rather than an emergency but estimates it will need to double the number of homes in the next 10 years, tying this in with the emergence of the Inverness and Cromarty Firth Green Freeport (ICFGF), which is expected to create around 10,000 jobs.

"My disappointment was that it focussed very much on the freeport," said Mr MaCrae.

"Inner Moray Firth and Moray enjoy a relatively buoyant construction sector and are experiencing population growth. 

"Many thousands [of units] are needed in rural areas and they have been needed for quite a while."

The construction crisis comes at a time when job opportunities in the Highlands and Islands are booming (Image: Highlands and Islands Enterprise (HIE))

"Lack of labour has got to be the biggest issue we are facing in rural areas," he added.

"Since the crash in 2007/2008 the rural construction sector has been decimated and it's never really recovered and needs more support. Without it, it's going to be a really problem to deliver the number of houses we need.

"I like to look at it as an opportunity but the barriers are round about who is going to build them - there aren't enough people here."

He said affordable houses are now costing up to £400,000 per unit to build, describing this as  "unsustainable."

"Communities could be doing much better value projects if we could source the labour to do it," he said.

"It's an absolute opportunity.

"We already got a lot of people from overseas sitting hemmed in with good skills in the refugee circuit but how do you them enable them to get out and about and actually use their skills."

He says there are many people in rural areas living in a poor standard of housing, like cities, but they are much less visible.

"In my opinion it's just as prevalent in rural areas as it is in urban area but it's a lot more silent," he said. "People just put up with poorer quality.

"The rural voice is not being heard the same.

"This is where needs and demand are skewed because local authorities tend to base their demand assessments on council housing or housing association waiting lists and that doesn't even tell a fraction of the story because in most rural areas they don't put their names down because there is not going to be housing there.

"Rather than put their name down and be offered something in an urban area where they don't want to live, they don't bother."

Local authorities operate a points-based system with a focus on alleviating homelessness.

 "Often the rural folk have a roof over their head -  the fact that its BTS  (Below Tolerable Standard housing) or it's over-crowded isn't a massive help to them," said Mr MacRae.

"It should be but when you are dealing with someone who is completely homeless it is a lower priority."

There is no silver bullet to fix housing shortages in rural areas but he says the Scottish Government could "ease off" on ever-increasing Net Zero building standards.

He said: "Everyone wants the most efficient heating system but if you have nobody there to install it and worse - especially for affordable housing providers -  you [can end up having] to pay the extra money to install it then you can't afford to maintain and repair it because you are having to drag folk from Glasgow to Wester Ross to service two heat pumps.

"We could provide some assistance for small companies around cash flow such as pre-purchase of materials so they don't have to worry about cash-flowing that."

He said the housing challenges comes at a time when the Highlands and Islands is experiencing unprecedented economic growth.

"There's a strong hotel industry, fish farming, the spaceport, Kishorn Port, wind farms, forestry, renewables and aquaculture," he said.

"There are masses of jobs and all of them should be rural but it's about confidence and to create that we need workers."

READ MORE:

Half the properties on island 'with high demand for housing' now second homes 

'Little heed' paid to cost of 'green' housing says Highland builder

Scotland's Housing Emergency – find all articles in series

Morven Fancey head of housing, skills and population for Highlands and Islands Enterprise (HIE) agrees on the extent of opportunity that lies ahead.

She says local authorities and housing associations are working hard, within the constraints of financial and market conditions, to deliver housing, including social housing.

The Highland Council is in the throes of the largest housebuilding programme in Fort William since the 1970s, while Lochalsh and Skye Housing Association has ambitious plans for Portree in Skye.

(Image: HIE)

She said: "Some of the larger employers in the region are also onboard and exploring the potential to collaborate with other businesses and with communities who have the best understanding of current and future housing needs. 

"Communities themselves are working to find innovative models and partnerships to deliver much needed new homes, with dynamic community organisations including the Mull and Iona Community Trust and Harris Development limited making progress in this approach.

"To really capitalise on the exciting economic trajectory we’re witnessing at the moment we need to ensure sufficient housing stock of mixed tenure and geographic spread."

Housing Minister Paul McLennan said: “Good quality housing is essential to attract and retain people in rural and island communities.

"From April 2016 to March 2023, the Scottish Government has supported the delivery of more than 10,000 affordable homes across rural Scotland of which more than 1,100 have been delivered in our island communities

“Our commitment to deliver 110,000 affordable homes, of which at least 70% will be for social rent and 10% in our rural and island communities, is backed up by our Rural and Islands Housing Action Plan which sets out the range of collaborative actions required to support housing delivery."