Meeting of the Parliament 25 January 2023
My colleague Graham Simpson rightly said that housing policy is extremely important—it certainly is. I will concentrate on the economic and geographical mobility aspect of the policy, which is absolutely critical when we are looking at the future. That is because there is extensive evidence in several quarters that the SNP’s current housing policy is hindering the mobility that we so desperately need.
Indeed, the Deputy First Minister has, rightly, said on several occasions in the chamber that the biggest challenge for the Scottish budget in future years is Scotland’s demographic profile, especially the diminishing size of the working population in relation to the total population, which will have knock-on effects on productivity and tax take. Therefore, it is surely important that the policy decisions that are taken on housing do everything possible to address those issues and the likely behavioural changes among the public.
I will give an example, which involves an issue that has been exercising the Finance and Public Administration Committee for some weeks. The Scottish Government has made it very clear that there are two intentions behind the proposal to increase the tax rate on the additional dwelling supplement from 4 per cent to 6 per cent—namely, to raise revenue and to protect first-time buyers. That is all well and good in principle but, as the Scottish Fiscal Commission, landlord associations and local authorities have all said, the potential exists for significant behavioural change as a result of the policy.
I will explain why. In many parts of Scotland, the only people who are buying and modernising properties are private landlords. Those properties include empty houses that are being brought back into use. That is extremely important activity, especially in our rural communities, which are already at risk of depopulation and where we very much need farm and rural sector workers. There is also a need to promote the tourism market, which is a market that Scotland can ill afford to undermine. Landlord associations complain that 44 per cent of their members are already intending to reduce their portfolios. That is very serious indeed for Scotland.
The issue is not simply one that affects some landlords’ income. From a general economic perspective, it matters in relation to ensuring that there is better housing stock and encouraging a more mobile workforce, which Scotland so desperately needs in order to improve productivity and geographical mobility. If Scotland is to be truly open for business, housing policy must play a critical role.
My colleagues have spoken about the recent rent freeze and have cited the reaction of several stakeholders, which was not surprising, given the Scottish Government’s inability to justify the different approaches to the rent cap in the social housing and private rented sectors. Critics make the case about the inflexibility of the policy, whereby the rent control applies irrespective of the financial positions of the tenant and the landlord, which means that a relatively well-off tenant who rents in the private sector is provided with financial protection that is not afforded to someone who is less well off in the social sector. That does not make sense.
John Blackwood of the Scottish Association of Landlords has rightly made the point that the rent freeze and eviction policy means that it is unsurprising that many landlords are selling loss-making properties, which is further reducing the housing supply at a time when demand is increasing. He has pointed out that while local authorities and housing associations can put up rents in order to make repairs and improvements, the Government has failed to acknowledge that private landlords face exactly the same challenges.
A few months ago, we had the ridiculous situation in which the University of Glasgow told students that they would be best not to enrol for their courses until they had found accommodation, because of the difficulty of obtaining suitable rented property. That is hardly an acceptable situation.
I do not doubt that housing policy is complex, particularly when it comes to matching supply with demand, but neither do I doubt that the current SNP interferences in market forces are making things a whole lot worse. They are forcing detrimental behaviour change, with the result that stakeholders who have been relied on to help the housing market are now being forced out. That is not good for Scotland or for the ambitions to achieve long-term growth.
16:53