Scotland’s housing crisis – what does it mean?

On 15 May 2024, after Scotland’s housing sector, local authorities, and the trade union movement penned an open letter to MSPs, the Scottish Government declared a national housing emergency. Argyll and Bute, Edinburgh, Fife, Glasgow, Scottish Borders, South Lanarkshire, West Dunbartonshire and Aberdeen City Councils have also declared housing emergencies in their respective council areas – with undoubtedly more to follow. But what is a housing emergency, and why do we have one.

What is a housing emergency?

By declaring a housing emergency, the Scottish Government and local authorities are formally recognising that there is a housing shortage and that urgent action is needed to tackle homelessness in Scotland?

Why is there a housing crisis?

Scotland, like the rest of the United Kingdom, is facing a significant housing crisis, which has been steadily looming for some time, but has worsened in recent years. This is driven by a combination of factors, including a lack of quality housing, rising demand for affordable housing, escalating construction costs and restrictions on funding. These factors, combined with the Covid-19 pandemic and the current cost of living crisis, have created the perfect storm to generate a housing emergency.

Scotland is still feeling the effects of the Right to Buy legislation in the 1980s which depleted Scotland’s social housing stock. Around one in three people bought their council house meaning a large chunk of the housing stock was removed, and the investment in building new social housing, or a lack thereof, has been unable to bridge the gap.

Housing providers are not receiving the investment that they once were, meaning there were 27% less houses completed in the 2023 financial year than in 2022. Six local authorities built no new homes in the 2023 financial year, and two local authorities additionally reported no new housing association completions. City of Edinburgh Council has confirmed that it will be unable to build any new affordable homes this year. The budget for social housing has been cut, and with only 21,092 affordable homes out of the targeted 110,000 by 2032 having been completed, it seems that Scotland has a long way to go to resolve this crisis and meet this target.

With a rise in private rents and the cost of living in general, local authorities are dealing with a higher number of homelessness applications. Local authorities have a duty to provide settled accommodation to any household who has found themselves unintentionally homeless or threatened with homelessness, but the local authorities do not have enough supply to keep up with the demand. This has led to an increase of 8% of households in temporary accommodation, and 9,860 children in temporary accommodation in the period April-September 2023.

What can be done?

Declaring an emergency means that there is formal recognition of the severity of the housing problem and that an intervention is required. However, there are no practical effects that automatically happen due to such a declaration being made. The Scottish Minister for Housing has urged the UK government to take action on mortgages, to commit to ensuring that local housing allowance rates meet 30% of local rents, and to abolish the bedroom tax and benefit cap to help alleviate pressures on housing in general. Many local authorities have implemented a ‘buyback’ scheme in which they will purchase properties which are either ex-council-owned, empty, and/or in demand for social housing within that area. This has been successful in many council areas, and it is often more cost-effective to purchase these properties and bring them up to standards than to build new homes from scratch.

Overall, Scotland’s housing crisis reflects broader issues of inequality, economic pressure, and urbanisation, which requires urgent and sustained action to provide affordable, secure housing for everyone. The Scottish Government has introduced measures such as rent controls in certain areas and commitments to build more affordable housing, but these have not yet significantly alleviated the crisis. Challenges include planning delays, funding constraints, and the need for more comprehensive long-term strategies.

In short, there is no singular magic solution, but investment in the sector is paramount to allow the supply of social housing to meet the demand currently needed.