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Homes for all of Scotland

Homes for all of Scotland. Andrew Mickel Chairman: Homes for Scotland Director: Mactaggart & Mickel Ltd. Availability of Finance is major constraint Both for consumers and companies Number of mortgage products have reduced by about 75%

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Homes for all of Scotland

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  1. Homes for all of Scotland Andrew Mickel Chairman: Homes for Scotland Director: Mactaggart & Mickel Ltd

  2. Availability of Finance is major constraint • Both for consumers and companies • Number of mortgage products have reduced by about 75% • Number of FTB 100% products reduced from several hundred a year ago down to none today • All financiers are reducing loan to value ratios • This requires larger deposits and less people in the market • Effectively limiting and reducing the number of qualified buyers • Big impact on sales and now consumer confidence • Output is rapidly falling, (includes affordable housing) Realities of Market conditions

  3. Future Trends

  4. Increase proportion of funds placed into‘LIFT’ to encourage private ‘Shared Equity’ schemes and allow low cost housing for sale • Fund andinvestin other housing types to provide a soft landing for house building economy • Release RSLs and Councils to purchase land, part completed and completed stock (safety net). Evidence of this to date? • Increase availability of“mortgage to rent” funding • Influence banks operating in Scotland to take a more balanced view of the risks here • Continue to givepolitical leadership to the Scottish market • Speed up delivery of planning reform work with Councils – not just passive “best practice”. Tension of concordat? What can Scottish Government do?

  5. Impact on population and housing planning targets • Need and demand are not going away • Impact on waiting lists; homelessness? • Delivery of affordable housing via S75 Agreements • Delivery of economic growth objectives • Housing is a driver as well as a product of growth • Loss of jobs locally • Impacts on skills/training programmes in construction Impacts on Council corporate objectives

  6. Falling revenue – Planning and Building Warrant applications • Loss of capital receipts from sale of assets • Loss of Section 75 contributions • Delays in receipt of surviving S75 contributions • Declining value of land/buildings • Reduced Council Tax revenue – fewer households Direct cost impacts on Council

  7. Cash and cashflow are critical – risk has to be reduced • Returns falling and return periods extending • S75 contributions will decline; payment schedule crucial • Council innovative financial models for infrastructure • Design and mix must be viable – avoid rigid policies • Use affordable housing to kick-start development: • Phasing • Buying land/stock • Design/build deals • Adjusting tenure mix • Developers will evolve – new models, more variety? • Culture Change (including Councillors too) • Edinburgh & Glasgow Resilience Planning to be implemented across Scotland Practical actions?

  8. Exert greaterinfluence on banking system to ease lending policies and criteria. • Injectnew securefundsinto financial markets, • TemporarilysuspendStamp Duty, especially on lower value home transactions • Reintroduce mortgage interest tax relief andreviewbenefits thresholds for those in difficulties. • Control future interest rate changes, reduce gap to LIBOR and ensure reductions pass onquicklyto consumers • Crosby Report – intervention to avert further collapse of mortgage lending (£100 billion guarantee) What can UK Government do?

  9. Venture Capital Trust – to include property development as a “qualifying trade” • Immediate acceleration of Capital Expenditure projects & provide monthly updates • New funding and criteria for investment in owner-occupation – “Resi Reits” What can UK Government do?

  10. UK vs. Scotland: constitutional debate • Scottish Futures Trust (son of PPP): either suspend it or deliver it ! • Bold response from Glasgow & Edinburgh City Councils: others to follow • UK banks vs. sovereign funds • Front line public sector staff skills : development economics • “Grand Projects” & 2014 Commonwealth Games • New Town Model (CPOs) • English Partnerships • Tax incentives for pension funds and financial institutions to enter the market • Councils to retain growth in non-domestic rates • Tax increment financing: Councils can borrow against future revenues in new development Infrastructure and Funding

  11. Market correction reacts against Brownfield flatted development being only show in town • New funding models could lead to more rental properties and shared equity • Ensure results from the HSTF • A chance to draw breath? • Crisis: a Chinese interpretation Future Predictions

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