Housing crisis

Raise tax on second homes tenfold, MSPs are told

Prof Russel Griggs
Prof Russel Griggs: ‘I am not concerned. I am terrified’

Council tax on second homes will need to rise tenfold to stop people buying them as it is not helping to ease the housing shortage in rural areas, MSPs have been told.

The Scottish government doubled the tax on second homes as part of a package of measures to make more properties available for local people.

However, Holyrood’s local government, housing and planning committee was told that the tax would need to rise ten times and changes made to the planning system to stop buyers acquiring properties that lie empty for much of the time.

Fundamentally, more homes need to be built to house the additional workers expected in rural areas to fill jobs provided by renewables projects. Without these homes, the economy will struggle to gain momentum, MSPs heard.

Larger building companies are unwilling to fund developments of fewer than 100 houses, while the cost of converting and retrofitting empty buildings into housing was another barrier.

Professor Russel Griggs, chairman of South of Scotland Enterprise, suggested that increasing the council tax rate by ten times on second homes may be required to provide a proper deterrent.

He said: “If you can afford to buy a second home, then doubling the council tax makes no difference to you.”

Ailsa Raeburn, chairwoman of Community Land Scotland, agreed with that view, saying: “It creates a bit of extra income for the local authority but will not stop people buying second homes, particularly when the values are so much lower than where their first home is.

“You either do a very punitive council tax or look at the planning system. You can start to identify second homes and look to cap second homes in areas where there is housing pressure.”

Prof Griggs added: “We see housing as one of the key challenges. I’ve been asked many times if I am concerned about housing in the south of Scotland and I am not. I am terrified.

“As we grow the economy where do we put the people to run those businesses and be part of those businesses? If we want to grow the economy and, more importantly, keep our young people we need to have somewhere for them to live.”

Stuart Black, chief executive of Highlands and Islands Enterprise, said: “In many parts of our region housing is a barrier to economic growth and the lack of houses is constraining businesses from expanding.

“We have the irony that in the past it was jobs which were lacking, so people left. Now we have jobs available and insufficient housing to accommodate the people who want to come.

“A huge amount of renewable energy will come from our region but that won’t work unless we have the people there to staff the industries, to drive that change.”

The Scottish government, which launched its rural housing action plan last in October, said 11,000 affordable homes would be available by 2032.

Springfield agrees £10m homes deal

Springfield Properties has signed a £10.1m contract with Moray Council for the delivery of affordable housing.

The Group will receive funds from the sale of the land to Moray Council in the current financial year and the design and build phase, which accounts for the vast majority of the contract value, is due to be delivered over the next 18 months.

The development is being funded by Moray Council and The Scottish Government. It is part of the Moray Growth Deal, which is designed to boost economic growth across the region, including through a project to deliver hundreds of affordable homes, and brings together Scottish and UK governments, Moray Council, public and third sector organisations and private businesses.

Innes Smith, CEO of Springfield Properties, said: “We are pleased to have been awarded this latest affordable housing contract from Moray Council, which is a long-standing partner of Springfield.

“As part of the Moray Growth Deal, it reflects the importance of housing delivery to driving economic growth – and the recognition of this importance by the Council and Scottish Government. With our strong land-holding across the region and established relationships, we are well-placed to be awarded further contracts under this project to provide much-needed homes.”

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