Bank of Scotland

Scotland’s cities need major investment in family homes

12 March 2015

Scotland’s largest cities need thousands of new family homes, according to a new Bank of Scotland report due to be published today (Thursday 12th March).    

The proposal is just one of a number included in Bank of Scotland’s How Scotland Lives report; a study of current trends in Scotland’s housing market. 

Shape of Scottish Housing Market

More than three in five people in Scotland (62%) own their own home, with 29% owning the property outright while 33% have a mortgage. Over a third (36%) rent a home or live with family and friends. 

Rental agreements secured through letting agents and landlords represents 12% of the housing market in Scotland while social housing makes up 14% of the sector.  Rental agreements secured through letting agents and landlords represents 12% of the housing market in Scotland while social housing makes up 14% of the sector. 

There are some marked differences across the country. Glasgow has the lowest home ownership with 39% owning their home, while the Highlands and Islands has the highest with home ownership at 68%. Glasgow has the highest number of renters with 25% renting privately and 20% renting social housing. 

Dwindling Downsizers

The over-50s in Scotland typically live in larger homes than younger age groups. In the past there would have been an expectation that this group would downsize however, less than 1 in 10 (8%) have any plans to do so.

When asked why downsizing wasn’t a consideration, most over-50s said they were happy in their current home including three quarters of over 65s. Over a third (39%) of over 50s said they felt no financial need to move to a smaller property.

With so few over 50s considering downsizing, there are significant implications for the housing market – not least in terms of housing mobility as most downsizers sell their homes to second steppers who are often looking to buy larger family homes.

Time to Build

There is no single solution to this complex and multi-layered series of challenges, but the research suggests that there is a need for: 

  • Continued help for First time buyers looking to get onto the property market.
  • Development of a new professional renting sector (both private and social) that will provide a realistic long term option for those that either do not want to buy or can’t afford to buy a house.
  • A need for more family homes in cities which are of both an acceptable standard and affordable. This push for additional housing must be accompanied by high quality neighbourhoods that provide pleasant, safe, secure environments, served by good schools, transport and other services.
  • Identifying obstacles preventing over 50s from moving and develop housing that meets the needs of older generations who are in both work and retirement for longer than ever before.

Bank of Scotland Commercial Banking managing director Alasdair Gardner said:

“This study identifies the major pressures facing Scotland’s housing market with demand for new rental and privately owned homes going to increase in the coming years.

“There is no quick fix to this challenge and facing up to it requires a sustained programme of investment.  We need to expand the supply of good quality homes available both to buy and to rent, at costs that reflect the varying means of all sections of society. All parts of the housing industry – government, local authorities, investors and housebuilders must work together to ensure we build the homes Scotland needs.” 

Read full press release.