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January 11, 2012

The trick to affordable housing

Ask any rural community what their top priority is and you can be pretty sure that affordable housing will figure high on the list.  What makes housing so unaffordable is the value of land – not the bricks and mortar. So the simple answer is to find some means of removing at least some of the land value from the equation. Such a mechanism already exists but it needs to be refined. Carnegie UK have commissioned some work that may be pointing towards an important breakthrough


Carnegie UK

Housing expert offers blueprint to get the best out of Scotland’s unique Rural Housing Burden mechanism

The Scottish Government is being asked to consider a series of recommendations to help improve the supply of affordable land and homes in rural Scotland. Di Alexander, Chair of both Lochaber Housing Association and the Rural and Island Housing Association Forum, was commissioned by the Carnegie UK Trust to undertake a review of Rural Housing Burdens (RHBs) – an innovative approach that helps rural communities to access land at a discount, and secure affordable homes for local people.

Based on extensive research by Mr Alexander, the Trust are today publishing a series of recommendations which include ways in which the Scottish Government and local authorities could encourage and support an increase in the use of Rural Housing Burdens (RHBs) to facilitate the delivery of their housing policies .

In places where RHBs have been used, including communities across the Highlands and in Dumfries and Galloway, many local families have been given the opportunity to build or buy their own homes who could not otherwise have afforded to do so. The RHBs have helped improve the medium-term sustainability of some fragile communities by persuading landowners to make land available at a discounted rate for the development of affordable housing.

Mr Alexander says such an innovative mechanism to reduce the shortage of affordable homes in rural areas of Scotland could be used more effectively and widely: “Rural Housing Burdens have had a beneficial but so far limited impact in delivering both more affordable land and more affordable homeownership properties for rural communities. However, they are not yet living up to their full potential. The recommendations we are putting forward aim to improve the mechanism by making it easier for families in rural areas to build or buy their own home, and ensure that, when they move on, the property remains affordable for the next family buying it.”

The report recommends that Scottish Government should consider how RHBs could provide more effective support for their own policy initiatives, including their ‘LIFT’ shared equity scheme. It also recommends that both the Scottish Government and local authorities explore the idea of setting up revolving loan funds to help rural housing bodies to buy back RHB properties when they are put on the market. Such loans would be repaid as soon as the property had been sold on.

Mr Alexander will also take on the role of Carnegie Associate during 2012 to work on behalf of the Trust to improve the understanding of rural housing burdens and increase their uptake.

Jennifer Wallace, Carnegie UK Trust Policy Manager, says that the proposals being put forward are both sensible and realistic:

“This report is an important starting point for a thorough examination of the issue of how RHBs can to be deployed more frequently and effectively in the future. Many of these issues are related to the dramatic changes in the housing market that have taken place since RHBs were introduced, while others are more fundamental.

“Rural Housing Burdens were and are an important innovation. To allow them to achieve their potential we now need to work with the Scottish Government and rural housing bodies to examine how we get the balance right between the needs and interests of homeowners and communities and what sort of resources rural housing bodies have to deliver more RHB properties.”

For a summary of the main report, click here