INTERVIEW: Nicola Barclay, CEO, Homes for Scotland
‘It’s important to be careful with initiatives which look sensible but have unintended consequences’
It’s the day after the SNP has revealed its plans to change council tax and Nicola Barclay is worried that they could backfire.
Property owners in the top four bands will pay more as part of a move towards what the government says is a fairer system.
Critics argue that the additional cost, on top of higher purchaser’s tax than buyers pay in England, risks deterring high earners from moving to Scotland.
“If we are trying to build a strong economy we need executives, and they want to buy homes in the top bracket,” says the chief executive of Homes for Scotland. “We want to attract these business leaders, so why hit them with disincentives which make it harder for them to move?”
She points out that the land and buildings transaction tax – which replaced stamp duty in Scotland – is higher for top priced homes than in England.
“You need to find the money for LBTT up front. It has to be in your bank account,” she says.
Barclay is just a month into the Homes for Scotland job, but the issues the sector faces are familiar ones that just keep throwing up new challenges.
As the body lobbying for housebuilders she awaits their response to the proposed council tax changes which will be the latest element to factor into the cost of housing provision.
“It’s important to be careful with initiatives which look sensible but have unintended consequences,” says Barclay. “If you layer council tax increases on top of LBTT you are looking at significant extra cost at the top end of the market. It may stop people buying or selling and that will impact on the rest of the house buying chain.”
Homes for Scotland is already fighting battles on a number of fronts including land supply, planning bureaucracy and help for first-time buyers, though she does feel that housing minister Alex Neil is on the side of the industry, which has been a huge benefit.
“Alex Neil really gets it. I have come into the job at a time when the minister understands the issues,” she says, though she knows that after the Scottish general election attitudes – and personnel – could change.
Activity around the sector is likely to pick up quickly after May’s vote. Her organisation hopes for an early response from the new government to its proposal for a “roof tax” to speed up the planning process.
Housebuilders currently spend months, sometimes years, negotiating with local authorities over the cost of providing for additional services associated with new developments. These range from extra schooling to health care. She gave as an example one builder which has taken four years to negotiate a deal with a local council.
“It quite often takes nine months to get planning permission and another nine to sort out these developer costs,” she says. “This is taking up a lot of council time and some of them outsource the work to lawyers, adding even more to the cost.”
HFS has suggested a simple roof tax which would be a calculation based on such things as the number and type of home and the area in which they are being built. It would give all parties a figure to work on from the outset.
“It would speed up the process for the builders and the councils, cut cost and get the homes built that we need,” she says.
She would also like to see greater consistency across local authorities which have different rules and standards on things such as building regulations.
“This causes enormous problems, particularly for the volume builders who buy supplies in bulk and have set house designs which have to be modified to meet local council requirements.”
Despite a pick up in activity Scotland is still not building as many homes as it did before the financial downturn and – notwithstanding Mr Neil’s understanding of the sector – the latest initiative to provide £195 million of equity support is not deemed sufficient to help stimulate buying.
The new house price threshold to qualify for Help to Buy is £230,000, which will fall next year to £200,000 and then to £175,000. When it was first launched it was £400,000.
“Buyers in vast parts of Scotland, mainly the east of the country, will not be able to access this initiative as prices are too high,” says Barclay who expects the industry to demand a revision to these bands.
“Of course, we don’t know how the market will develop over the three years of the scheme and if mortgages become more easily obtainable it won’t matter. That would be the best outcome.”
An immediate concern is the industry’s poor public image and she is about to turn her attention to launching a campaign to counter the negativity that greets new developments.
“Every time there is a proposal to build houses there is an avalanche of negative press and local reaction,” she says. “People are scared of change and don’t seem to like more houses being built near them.
“We have to point to the positives: the added vibrancy and the fact that more homes means more people helping keep local services and shops alive.”
Another reason perhaps, to hope that the new government minister remains supportive and can give the campaign a lift.
Education: Currie High, Heriot Watt University, Edinburgh (town and country planning)
Career highlights: First job was as a sales girl at Wimpey Homes, though worked as an au pair in Austria and in a jewellery shop before university; moved into land buying for various house builders; worked in asset management for Scottish Futures Trust before returning to Homes for Scotland last year in a senior planning role; promoted to CEO from 1 February.
What annoys you?
Pot holes in the roads.
What is your weakness or strength?
I am quite impatient to get things done. I see it as a strength.
Who has been most supportive in your career?
My husband. He has really encouraged me, and Jim Mather, chairman of Homes for Scotland. He has provided fantastic support.
Photos by Terry Murden