Scotland’s rural housing emergency

There is a myriad of complex issues behind Scotland’s rural housing emergency; high build costs, lack of scale to attract developers, lack of capacity to complete projects, and a market failure of development and private rented sectors in rural communities.  All of these predate the recent flurry of housing emergency declarations from Scottish councils and the Scottish government. 

Over the past five years there has been a change in the ability of working people to access a standard of housing they require. Many jobs in rural areas are lower paid, with wages, in general, not keeping pace with inflation, which is compounded by the increases in housing costs. This creates a barrier to attracting people to work in rural areas and retaining existing key workers.

There is a significant lack of investment in private rented housing in many of our rural areas. Coupled with very low levels of speculative investment, the challenges of attracting people to live and work in these communities is stark.

For any rural area there is an importance in having a good supply of higher priced homes for sale. This enables areas to attract higher skilled occupations, business leaders and managers essential to delivering key projects these communities need to thrive. Our rural communities also need to cater for a variety of short-term accommodation, particularly for infrastructure project workers and seasonal accommodation for tourism or agricultural staff. This leaves a difficult balancing act between the importance of catering for these groups and local housing needs.

Taking Scotland’s island communities as an example, we can see there is significant housing challenges in many sectors. Energy companies state that housing is the top risk in building out the transmission network; whilst the tourism and hospitality sectors are on the receiving end of criticism for exacerbating housing shortages through short term lets, as well as having to operate on reduced capacity as they struggle to recruit enough staff due to lack of accommodation.

The Scottish government’s 2023 Rural and Islands Housing Action Plan sets out a series of welcome proposals. These include delivering 11,000 homes by 2032, supporting community led affordable housing through the Rural and Islands Housing Fund and delivering the Rural and Affordable Homes for Key Workers Fund to name a few.

However, this is set against the context of a 37 per cent cut to the Affordable Housing Supply programme over the last two years, an 18 per cent fall in new social housing completions in 2023, eight councils declaring a housing emergency and house prices in Scotland being more than five times the average wage.

Rural, island and coastal communities play a fundamental role in a variety of areas from trade and commerce, tourism, renewable energy and food production. All these areas have significant potential to provide opportunities for major economic growth. A key message from the sector must be that by addressing housing shortages we can address areas of depopulation and help to stabilise and grow the economy.

So far, it’s not good news as we pass the halfway point in the year. Many of our rural, island and coastal communities have an ageing demographic and if they want to retain and attract key skills and knowledge, we desperately need a housing supply that fits the needs of our communities. We don’t only need brave policies but also action at every level of government to tackle today’s housing emergencies. If we don’t, then I fear the crisis will continue, and the sustainability of many rural communities will be endangered.