Homes for all of scotland
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Homes for all of Scotland. Andrew Mickel Chairman: Homes for Scotland Director: Mactaggart & Mickel Ltd. Availability of Finance is major constraint Both for consumers and companies Number of mortgage products have reduced by about 75%

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Homes for all of scotland

Homes for all of Scotland

Andrew Mickel

Chairman: Homes for Scotland

Director: Mactaggart & Mickel Ltd


Homes for all of scotland

  • Availability of Finance is major constraint

    • Both for consumers and companies

  • Number of mortgage products have reduced by about 75%

  • Number of FTB 100% products reduced from several hundred a year ago down to none today

  • All financiers are reducing loan to value ratios

  • This requires larger deposits and less people in the market

  • Effectively limiting and reducing the number of qualified buyers

  • Big impact on sales and now consumer confidence

  • Output is rapidly falling, (includes affordable housing)

Realities of Market conditions


Homes for all of scotland

Future Trends


Homes for all of scotland

  • Increase proportion of funds placed into‘LIFT’ to encourage private ‘Shared Equity’ schemes and allow low cost housing for sale

  • Fund andinvestin other housing types to provide a soft landing for house building economy

  • Release RSLs and Councils to purchase land, part completed and completed stock (safety net). Evidence of this to date?

  • Increase availability of“mortgage to rent” funding

  • Influence banks operating in Scotland to take a more balanced view of the risks here

  • Continue to givepolitical leadership to the Scottish market

  • Speed up delivery of planning reform work with Councils – not just passive “best practice”. Tension of concordat?

What can Scottish Government do?


Homes for all of scotland

  • Impact on population and housing planning targets

  • Need and demand are not going away

  • Impact on waiting lists; homelessness?

  • Delivery of affordable housing via S75 Agreements

  • Delivery of economic growth objectives

  • Housing is a driver as well as a product of growth

  • Loss of jobs locally

  • Impacts on skills/training programmes in construction

Impacts on Council corporate objectives


Homes for all of scotland

  • Falling revenue – Planning and Building Warrant applications

  • Loss of capital receipts from sale of assets

  • Loss of Section 75 contributions

  • Delays in receipt of surviving S75 contributions

  • Declining value of land/buildings

  • Reduced Council Tax revenue – fewer households

Direct cost impacts on Council


Homes for all of scotland

  • Cash and cashflow are critical – risk has to be reduced

  • Returns falling and return periods extending

  • S75 contributions will decline; payment schedule crucial

  • Council innovative financial models for infrastructure

  • Design and mix must be viable – avoid rigid policies

  • Use affordable housing to kick-start development:

    • Phasing

    • Buying land/stock

    • Design/build deals

    • Adjusting tenure mix

  • Developers will evolve – new models, more variety?

  • Culture Change (including Councillors too)

  • Edinburgh & Glasgow Resilience Planning to be implemented

    across Scotland

Practical actions?


Homes for all of scotland

  • Exert greaterinfluence on banking system to ease lending policies and criteria.

  • Injectnew securefundsinto financial markets,

  • TemporarilysuspendStamp Duty, especially on lower value home transactions

  • Reintroduce mortgage interest tax relief andreviewbenefits thresholds for those in difficulties.

  • Control future interest rate changes, reduce gap to LIBOR and ensure reductions pass onquicklyto consumers

  • Crosby Report – intervention to avert further collapse of mortgage lending (£100 billion guarantee)

What can UK Government do?


Homes for all of scotland

  • Venture Capital Trust – to include property development as a “qualifying trade”

  • Immediate acceleration of Capital Expenditure projects & provide monthly updates

  • New funding and criteria for investment in owner-occupation –

    “Resi Reits”

What can UK Government do?


Homes for all of scotland

  • UK vs. Scotland: constitutional debate

  • Scottish Futures Trust (son of PPP): either suspend it or deliver it !

  • Bold response from Glasgow & Edinburgh City Councils:

    others to follow

  • UK banks vs. sovereign funds

  • Front line public sector staff skills : development economics

  • “Grand Projects” & 2014 Commonwealth Games

  • New Town Model (CPOs)

  • English Partnerships

  • Tax incentives for pension funds and financial institutions to enter the market

  • Councils to retain growth in non-domestic rates

  • Tax increment financing: Councils can borrow against future revenues in new development

Infrastructure and Funding


Homes for all of scotland

  • Market correction reacts against Brownfield flatted development being only show in town

  • New funding models could lead to more rental properties and shared equity

  • Ensure results from the HSTF

  • A chance to draw breath?

  • Crisis: a Chinese interpretation

Future Predictions


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