Having worked in Scottish property for over two decades, I believe the solution must extend beyond simply building more social housing, although that remains vital. We must also unlock the potential of the private rented sector (PRS) to provide long-term, affordable homes at pace.
Scottish Housing News has reported that, between 2019 and 2023, the Scottish Government spent approximately £750 million on temporary accommodation. What if that same funding were used more effectively, by helping vulnerable families secure permanent homes in the private sector?
With the right support, private investors could be encouraged to refurbish and rent out low-value, long-vacant homes across Scotland. As of September 2024, there were 43,538 homes that had been empty for over six months, and 31,596 for more than a year. These properties, often in economically disadvantaged areas, require significant refurbishment and currently offer little appeal to landlords or buyers.
If local authorities could offer rent guarantees for three to five years, paired with assurances on property conditions upon return – investors would be able to generate stable returns even after upgrade costs. It would de-risk the proposition, bring dilapidated homes back into use, and offer families stable, dignified housing. For the public purse, it would be a far more efficient and humane use of funds than paying for temporary accommodation.
Right now, the supply of new rental homes is almost entirely driven by circumstantial landlords, people renting out their own homes for a short period while living elsewhere. These are not long-term solutions, nor do they provide housing for those in greatest need.
The sharp decline in investor participation is due in no small part to the Additional Dwelling Supplement (ADS), now set at 8 per cent. Originally introduced to reduce investor competition in the first-time buyer market, it has also eliminated vital investment in areas with the greatest housing need.