Scottish housebuilding lower due to planning policies, MSPs told

House building in Scotland has fallen behind England because of different planning policies, MSPs have been told.

The amount of homes being built in Scotland is just 68% of the number before the last recession, while south of the border house building is back to pre-recession levels, Holyrood’s Economy Committee heard.

There is a shortfall of about 80,000 homes across Scotland compared to England, according to Nicola Barclay, the chief executive of Homes for Scotland, who said: “The main difference is policy.”

“In England they brought out the national planning performance framework in 2012 and since then they have had a huge amount of growth in the numbers [of new-build houses]”, she added.

Ms Barclay warned that many Scottish house builders are looking to invest in England “because they see that it’s easier to build and get quicker and better returns on their investment”.

Nicola Woodward, director of planning consultants Lichfields, explained to MSPs during the committee that Scotland has less-rigorous policies for local authorities when it comes to planning.

Shortly after new guidelines were introduced in 2012, more than a third of proposals in England were rejected for not adequately addressing the number of homes needing to be built, Ms Woodward said.

“There is a policy requirement to plan for your objectively-assessed need for housing,” she said, adding: “That’s not happening in Scotland.”

She cited four proposals that have been approved by planning reporters recently in Scotland, despite the plans not having a sufficient number of houses due to be built.

In England, “the plans would have been kicked back and local authorities told to look again,” she said.

However, Craig McLaren, the Scotland director for the Royal Town Planning Institute, defended the planning system, pointing out that the number of planning permissions approved were rising, from 27,000 in 2016 to 29,500 in 2019.

“I don’t think planning is the main issue,” he said.

“Planning is not perfect and we have to fix parts of it, but it’s not the key issue.

“The key issue for me is getting from the planning permission to the actual shovel in the ground.”

Shona Glenn, from the Scottish Land Commission, argued that there needed to be greater involvement from the public sector in house building, suggesting its role was drastically scaled back during the time of Margaret Thatcher’s government.

Ms Glenn said: “In the 30 years after World War Two, when the planning system first came into existence, the public sector took a really proactive approach to building and delivering large-scale infrastructure projects and large volumes of housing.

“That all changed and the public sector pulled out of that business.

“If we want to deliver the large-scale ambition for housing this country needs now, that probably needs to change and the public sector needs to take a much more proactive role.”

MSPs also questioned the construction experts on the issue of ‘land banking’ — where land owners hoard sites, waiting for prices to rise.

Responding to Andy Wightman MSP, Ms Barclay agreed there were some examples, including an area of Leith Docks, where the practice took place, but said: “It’s not that common – and it’s a problem when it’s brownfield land and it blights those communities – but when a house builder is looking for a site, they are looking to build houses on it. That’s what they do.”

She added: “I would say that the majority of house builders do not do that because they make their money by selling houses and getting a return on their investment that they’ve put in, but that’s not to say that some land owners don’t do that.”

Craig McLaren cited the Letwin review, undertaken in England, which looked at the issue of land banking and said: “It said you couldn’t rely on large-scale housing developers to solve the housing crisis because they will have land but they won’t release it all at the same time…because that will have an impact on the prices they can charge because there could be an oversupply.”

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