Housing Investment Taskforce report

Introduction

Background to the Housing Investment Taskforce

1. The Housing Investment Taskforce (“the Taskforce”) was established in April 2024 by Paul McLennan MSP, Minister for Housing, to identify actions that will unlock both existing and new commitments to investment in housing across all tenures.

2. The Taskforce comprised investors and investees actively investing and delivering at scale, with the potential to invest further to support new supply of housing in Scotland. The organisations involved in the Taskforce cover both public and private sectors and their different experiences have combined to provide a view on how business models could evolve and new ways found to attract investment at scale.

3. While unreservedly focussing on their investment remit, the Taskforce has been clear that investment is not an aim in itself but a priority because of what it delivers for people, communities and businesses across Scotland. For those at the hardest edges of housing need, this investment can be life-changing. The Taskforce recognises that there are balances that must be struck and that government at all levels, housing providers, developers and investors need to take decisions in the context of their own objectives and priorities, looking after the interests of the people they serve. The Taskforce has sought to find common ground across these priorities to reach a consensus position that will enhance delivery of quality new homes in Scotland and improve resilience through economic cycles.

4. The investment focus is, by necessity, medium to long-term. Nevertheless, there are choices that could be made now that would set Scotland on a new trajectory for housing investment. This means focussing on the actions that will have the greatest impact on creating the conditions for new investment to flow – and ensuring Scotland reaches its potential. There is no silver bullet, but structural changes initiated now to deliver, over the long-term, fundamental improvements to supply are within our gift.

Remit and approach

5. The remit of the Taskforce is to:

• build investor confidence and attract further mobile capital investment into housing;
• unlock existing financial commitments;
• encourage and promote new delivery partnerships; and
• identify ways to shift the balance of investment in affordable housing to increase private funding, including from relevant comparator markets and jurisdictions.

6. The Taskforce was created against a backdrop of market and public funding challenges. The economic operating context is challenging for everyone who wants to build new homes – and both public and private sectors are navigating more competing demands and complexity than ever before. The Taskforce has had to select its areas of focus against a very broad landscape and hopes this focus on investment will complement the work of others on wider parts of the housing system.

7. The Taskforce adopted seven workstreams to consider priority areas in detail.

• Workstream 1 - Housing Bill – rent control measures
• Workstream 2 - Housing investment and potential for adopting good practice from beyond Scotland
• Workstream 3 - Long lease finance/income strip and other mechanisms to deliver affordable homes
• Workstream 4 - Affordability and flexibility of finance and borrowing limitations to fund affordable housing
• Workstream 5 - Home ownership
• Workstream 6 - Delivery through new partnerships for housing development
• Workstream 7 - ‘Stalled’ sites and potential interventions

8. There was a great deal of synergy in the key themes emerging from each workstream and conclusions from all are reflected throughout this Report. The remainder of this Report identifies and summarises these key themes.