Builders in a bind over housing red tape

RED tape and a constant flow of legislation are adding to the cost of building homes and making it increasingly difficult for first-time buyers to gain a foot on the housing ladder, say industry leaders.

Three housebuilders are now demanding a pause in new rules and guidelines that cover everything from climate change to providing for the disabled.

They want to see the appointment of a dedicated housing minister to sort out what one of them called a planning and regulatory structure in Scotland which "is running the risk of imploding".

Mike Walker, group chairman of the Walker Group, Andrew Mickel, director of Mactaggart & Mickel, who has just become chairman of Homes for Scotland, and Stuart Peters, chairman of Melford Developments in Edinburgh, say that regulatory and other demands have reached a critical point for the housebuilding industry.

Red tape is forcing up the price of properties at the lower end of the scale and putting the already difficult first step on the property ladder too high for many potential buyers.

Walker, who has run his own building firm in Scotland for nearly 40 years, said: "This ongoing regulatory burden means more and more is being demanded of the purchaser, and of the builder. You get to the point where the regulatory pressures become increasingly unsustainable.

"New regulations being introduced in Scotland relating to climate change, for instance, are to be set at a much higher level than in England. As our buyers see their own costs rising in their weekly shopping basket, it's the same for the housebuilder who is having to account for some hefty red tape, financial demands and a global increase in material costs.

"Government and local authorities have to realise we are coming into a period of more consolidation and stability, and that the added burdens being placed on us have to be slowed or reversed.

"We appreciate that they have to address many issues – but each issue should be carefully assessed. We have reached a critical point where builders simply can't produce properties at affordable prices for first-time buyers under those regulatory conditions."

All three said there is a strong case in Scotland for a social affordable housing policy that stipulates a percentage of every site aimed at first-time buyers, and not the current trend for social rented housing.

Mickel said: "There is also a very strong argument for a dedicated housing minister to handle this vital Scottish industry."

The overall assessment of the Scottish property market is that it is more of a return to more "normal" levels of price inflation compared to recent years when, in some places, it hit 25% to 30%.

All three insist that the slowdown in Scotland is a far cry from the 'crisis' being billed in the south and that with plenty of new housing stock available there are bargains to be had by those buyers with finance available.

Scottish ministers' aspirations are for 35,000 homes a year to be built from the middle of the next decade.

But Mickel warned that since last autumn the industry has been hit by 14 housing-related pieces of draft planning legislation, all of which have caused plans at numerous projects being handled by M&M to be modified, often at considerable cost to the builder.

"We never know what new policies are coming through this week or next. Local authorities are changing their minds on a whim, presenting supplemental planning guidelines which aren't analysed independently, and there are also different interpretations of EU legislations," he said.

Peters, too, is feeling the frustration: "The system is running the risk of imploding in Scotland. I have sympathies with the departments involved, who themselves are under- resourced and under enormous pressure to cope."

Historically, planning has fallen under the remit of local government. The three builders say there is a genuine concern within the industry that as the market slows, investment from smaller builders could be delayed if planning consent remains as tortuous a process, and some could struggle to survive.

Walker said: "I've been in this business 39 years. At one time if you wanted to remix a development with new types of property to meet changing market conditions, for instance, you could put in an amendment and get it in six weeks. Nowadays you'd be lucky to get it in a year."