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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

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

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?

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

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

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?

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?

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?

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

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