Rural and island communities are facing a housing crisis with second/multiple home ownership, holiday lets and a rise in both rents and mortgages that has resulted in workers being unable to find accommodation. A balance is needed between the importance of catering for the tourism industry and local housing needs.
One of the largest employers in the islands and rural areas is the aquaculture sector. Represented by Salmon Scotland, the organisation states that it either owns or rents 60 properties in Eday Orkney, in Tarbert Harris, across Sutherland, the Uists, Mull, Ullapool and Applecross. These properties are housing more than 130 workers.
Salmon Scotland says that due to rises in rents and what it calls the ‘cluttered’ licensing regime that the sector will be paying out over £20million to ‘various regulators and quangos’. Money which it wants the Scottish Government to ringfence with at least half to be ‘reinvested in rural communities, with a particular focus on housing.’
“The Scottish salmon sector is vital for Highland and island economies, but too often our member companies face employment challenges because of the lack of rural housing.
“I know the Scottish Government takes this issue very seriously and we hope to see progress with some of its initiatives, but we also have a solution that should be introduced urgently.
“The cluttered licensing regime and planned rent hikes means that more than £20 million per year is soon expected to be paid by salmon farmers to regulators and quangos – rather than that all going to a pot in Edinburgh, we believe half should be ringfenced for rural housing in coastal communities.”
Tavish Scott, chief executive of Salmon Scotland
Aquaculture workers are only one sector being affected by the affordable housing shortage. Key workers like teachers and health and care workers are struggling to find housing. Families and young people either wishing to remain in or return to communities are unable to do so because home ownership/ rental is unaffordable.
Second/Multiple Home Ownership
The Scottish government is introducing new powers to local authorities, who have responsibility for housing, to charge up to double the full rate of council tax on second homes. At the end of September 2022, there were 24,287 second homes in Scotland. As of September 2023, the number of second homes decreased by 1 percent (226 homes) to 24,061. A very small movement in numbers when so many are looking for their first home.
Councils will be able to increase the charges from 1 April 2024, with rates for the first year being based on those from 2023-24.
The change brings second homes into line with council tax policy on long-term empty homes and aims to increase housing availability by encouraging more homes to be used for living in.
New owners of properties that have previously been empty for more than twelve months will now have a six-month grace period, during which they will be protected from paying double the full council tax rate, with the potential for the six months to be extended by councils. This is subject to evidence that renovations or repairs are being undertaken by the owner with a view to the building being brought back into use.
Commenting on the legislation which was passed by the Scottish Parliament Councillor Katie Hagmann, COSLA (the body which represents Scotland’s Local Authorities) resources spokesperson, said:
“I am delighted that this important legislation has now been given Parliamentary approval. COSLA very much welcomes the ability for councils to take the decision to increase the premium on second homes in their areas.
“This supports our long-standing position that councillors who are closest to their communities should be empowered to take the decisions about what best works in their local communities, demonstrating the value of the Verity House Agreement.”
Empty Homes and New Builds
According to data from council tax returns, there were 46,217 long-term empty properties as of September 2023, which is an increase of 4 percent (1,616 properties) from the 44,601 properties in 2022.
Taken over the same period there were 21,952 all-sector new build homes completed in Scotland a decrease of 6 percent (1,355 homes) on the 23,307 completions in the previous year. Decreases were seen in private-led new build completions (3 percent or 491 homes) and local authority new builds by 44 percent (or 1,241 homes) whilst housing association new build completions increased (9 percent or 377 homes).
The number of new build homes started across all sectors decreased by 24% (5,260 homes), with 16,274 starts in the year to end September 2023. This was down from 21,534 starts in the previous year to end September 2022, and the lowest annual figure to end September since 2014.
Private-led new build starts decreased by 19% (3,017 homes), housing association new build starts decreased by 34% (1,099 homes) and local authority new build starts decreased by 50% (1,144 homes).
Rents are Rising
The number of registered properties on the Scottish Landlord Registration System as of October 2023 was 344,276.
Average rents for 2 bedroom properties, the most common size of property in the private rented sector, averaged an increased in Scotland by 14.3% , or £841 per month, up £105 per month compared with the previous year.
Not every Local Authority area shows this level of rise but all have increased. Average 2 bedroom rents increased in all 18 areas of Scotland. Increases in 11 of these areas were above the average 12 month UK CPI inflation rate of 9.0%, ranging from 9.6% (or £59 per month) in South Lanarkshire up to 22.3% (or £191 per month) in Greater Glasgow. The lowest increases were seen in Dumfries and Galloway (1.5% or £7 per month), West Lothian (2.3% or £16 per month), Perth and Kinross (2.8% or £18 per month) and Highland and Islands (3.0% or £19 per month).
So far it is not good news as we start a new year. Orkney has an aging demographic and if we want to retain our young people and be able to provide public services we desperately need a housing supply that fits the needs of our community. We need brave policies and actions at every level of government to tackle today’s housing crisis. If not, then the housing crisis will continue and the sustainability of many island and rural communities will be compromised.
