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BIG CHANGES COMING - Scotland’s New Planning Regime

Some very important changes are coming to #Scotland soon because of new planning reforms that will affect investors, developers and real estate agents.

According to Property Week, for the first time, the #Scottish government will set goals and targets that all local authorities across Scotland would have to meet.

For example, the Scottish government is currently seeking innovative and efficient ways to “radically minimise the carbon emissions – therefore, Scotland has committed to reach a zero-carbon emissions target by 2045, and all council will set ambitious climate targets that developers will have to meet if they want planning permission granted. In addition, Edinburgh City Council is considering new affordable housing targets – the plan is to increase the provision of affordable housing requirements from 25% to 35% as Edinburgh City Council has pledged to deliver 20,000 affordable homes by 2026, which is outlined in Edinburgh’s Choices for City Plan 2030 and will be funded by the Scottish government which is ready to invest more than £300m in affordable housing.

How will these changes impact the property industry in Scotland?

Affordable Housing

“The idea to increase the provision of affordable housing from 25% to 35% would have significant implications for the property industry”, agrees the chair of the Scottish Property Federation, Robin Blacklock.

But why the mood around this idea among the property developers have being considered as negative?

Although, it is a common practice of many council authorities across the UK lately to force developers to implement affordable housing in their projects with 15 units or more in order to help to deliver homes for mid-market income earners, without any doubt, the proposal regarding the increase of affordable housing requirement in the capital has received the most vocal opposition from the construction sector and property development industry as many developers express their concerns regarding the constraints imposed by the requirement to include affordable homes into their projects.

The plan to increase the provision of affordable housing requirement with 10%, from 25% to 35%, would affect significantly the new residential developments and leading experts in the industry believe that this will restrict the rate of development in Edinburgh. In other words, city’s development could slow down if the projects are not viable. “As an industry, we understand what they’re trying to achieve,” says Blacklock, “but it could have unintended consequences”.

Opponents of the idea fear it will hinder rather than help the city. “It’s all about viability,” says another leading expert, “If you’ve got to provide 35% affordable housing of our projects, our Build-To-Rent (BTR) development is less viable.” In this context, another issue arising from that is the fact that the mix of affordable with private housing could often result in less desirability of the private homes and consequently, affects negative their sale price and position on the property market. For example, if you look at a prime development with penthouses overlooking a park in central Edinburgh, the associated affordable housing on the site could possibly deter some buyers and, therefore, the value and sale price of the whole development. Therefore, most of the developers fear that the effects of this new idea for implementing affordable housing into luxury development would certainly affect both the land and property values and would be a constraint on residential developments and property developers in the capital.

However, on the other hand, it is strongly argued and supported by the advocates of the idea that this is a small price to pay to prevent segregated zones of cheap affordable homes in Edinburgh like the 1960s construction of council tower blocks. Moreover, Edinburgh risks repeating the same housing mistakes that have made central London increasingly unaffordable and inaccessible to ordinary households and families, especially to the most vulnerable in the society. The Scottish capital has been harmed by long-term underinvestment in affordable housing and this needs to be changed “What we are seeing is a hollowing out of affordable homes in the city centre”.

But property industry representatives assume these new policies could lead Edinburgh to under-deliver on its housing targets by deterring developers and investors from new building properties there because they would not be as financially viable.

Emissions Reduction

Another of those new important changes is about the fact that the Scottish government is looking at new innovative and efficient ways to “radically accelerate the reduction of carbon emissions” – in this regard, Scotland has committed to reach the zero-carbon emissions target by 2045, and the new planning bill suggests that new developments will have to be in line with those commitments and contribute to meeting Scotland’s climate targets. Until the new framework is adopted, it will not affect the currently existing developments, but once adopted - it will form the key basis on which planning decisions are made and planning applications are granted.

On top of that, Glasgow and Edinburgh are fiercely competing between each other to be the UK’s first city to hit net-zero carbon emissions. Last year, Edinburgh City Council ambitiously pledged that the capital will become carbon-neutral by 2030 and in its policy proposals, the local authority says it wants “all buildings through their design and the use of low and zero-carbon generating technologies to be carbon-neutral”.

Demand for buildings to meet these standards is also coming from tenants at the moment as large corporations and medium and small business as well all have green clauses in their mission & vision and business plans, suggesting that developers and landlords will need to deliver more sustainable and eco-friendly developments one way or another.

In addition to these changes, planning fees are set to double in #Scotland as well under the new planning bill. The fees hike, requirements for new buildings and property developments to meet climate standards and new affordable housing requirements are just a few of the major policy changes that are being proposed to be put into place this year.

As property developers and real estate agents ourselves, we at VG Homes 2019 Ltd take pride in being always up to date with the latest property news and headlines from around Scotland, especially the Central Belt! So, if you are looking for more information or an expert opinion regarding a specific matter of your interest, do not hesitate to contact us and our team would be able to offer you guidance and advice! What’s more, you can always subscribe to our weekly newsletters to receive the latest property market news and statistics straight to your inbox or follow us across our social media platforms!

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