We're on track and committed to delivering on our ambition to deliver 20,000 affordable homes by 2027, despite the UK-wide impact on the development of affordable homes following the global pandemic.
In its Strategic Housing Investment Plan (SHIP) 2022-27 report being presented to the Housing, Homelessness and Fair Work committee next week (4 November) councillors will be asked to approve the proposals ahead of submission to the Scottish Government.
The SHIP 2022-2027 highlights the progress being made which includes the projection that 7,500 new affordable homes will be approved by 31 March 2022 and 5,790 completed. There are currently over 2,100 homes under construction on 34 sites across the city.
A strong pipeline has also been identified of 11,118 affordable homes that could be approved for site start and 10,124 potential completions by 2027.
Despite over 18 months of disruption for the entire Scottish house building sector, it is anticipated that the delivery of the interim milestone of 10,000 homes will be achieved midway through 2023. There are currently 25 projects, equating to 1,456 approvals, that have been delayed, primarily as a result of the COVID-19 pandemic. Over 75% of these projects have just slipped into the subsequent year.
This comes in the wake of national pressures on the UK and Scottish house building sector. In the Scottish Government’s “Housing statistics quarterly update: September 2021” it sets out that in June 2021 affordable housing approvals were down 36%, compared to the same time last year. Affordable housing completions are also down 5% year-on-year, but when compared to 2019, there is a reduction of over 15%.
Added to this, as construction projects worldwide have recommenced post-pandemic, a surge in materials demand and prices has been seen which build on the pressures being seen as a result of the UK’s exit from Europe. The Office for National Statistics projects a rise of 7-8% in material prices, with increases for certain materials, such as timber, expected to more than double during the course of the year.
Councillor Kate Campbell, Convener for the Housing, Homelessness and Fair Work Committee, said:
There are extreme pressures on housing in Edinburgh and a desperate need for more affordable homes. We’re doing all we can to drive forward our house building programme so that our residents can have permanent homes that are energy efficient, safe and affordable. There are constraints, from Brexit and Covid, which have had a severe impact on supply chains, material costs and the labour market, which are affecting housebuilding across the UK.
That said, the good news is that this is the largest ever SHIP brought forward. It sets out a positive long-term picture and shows we are on track to deliver a programme for 20,000 affordable homes over ten years.
We’ll continue to work hard with our housing association partners to build more homes for social rent. But we need to look at what more we can do. We were the first local authority to develop an Affordable Housing Policy through planning – where 25% of the land on any new development must be given for affordable housing. Now, through the City Plan, we’re proposing to increase the affordable allocation from 25% to 35%.
We have a strong track record in delivering new social rented homes. This has resulted in an additional £36 million of grant funding being given to Edinburgh over the last five years. We’ll work hard to make sure this continues, alongside making the case to the Scottish Government for increased investment in social housing in our city.
Councillor Mandy Watt, Vice Convener of the Housing, Homelessness and Fair Work Committee said:
The Edinburgh housing market has remained resilient throughout the pandemic, however the full impact of lockdown & the continuation of restrictions, combined with Brexit, on the wider economy & the job market is not fully known. Those on low incomes will continue to be the greatest affected and therefore affordable housing needs to play a key role in a green and sustainable recovery.
In term of delivery, funding and land supply remain two key challenges for delivery. The SHIP will require £329.6m in grant funding, or £65.9m per annum on average, or a 29% required annual increase, based on current benchmarks in order to meet the overall ambition of 20,000 homes. The Council will continue to work with Scottish Government and its partners to stretch available grant funding as far as possible to maximise the number of social rented homes that can be delivered.
While our Registered Social Landlord (RSL) programme is almost entirely dependent upon private developers bringing forward sites for development through the Affordable Housing Plan (AHP), we’re looking to mitigate this risk, through our Land Strategy by working on 20-minute partnerships with private sector & RSLs, inviting interest from the private sector to bringing forward opportunities for Council led delivery and working closely with public sector partners.