SNP Ministers Plan Massive Quango to Buy Unsold Homes

Strategic Insights -

Scotland's SNP government is proposing to create a massive national quango, the National Housing Trust (NHT), to buy unsold new homes and rent them to middle or low-income families. The plan, backed by Communities Minister Alex Neil, aims to address housing needs and help housebuilders through the recession. The NHT would use almost GBP200 million borrowed by local government to buy 2000 homes, which would then be leased to families on short assured tenancies before being sold off after five to 10 years.

Key Takeaways:

  • The National Housing Trust (NHT) is a proposed quango to buy unsold new homes in Scotland and rent them to middle or low-income families.
  • The plan aims to provide affordable housing for low/moderate income households that are not eligible for mainstream social housing and cannot afford private sector rents.
  • The NHT would be a state-run national landlord, with central government, councils, and banks overseeing a string of "special purpose vehicles" for each housing development site.
  • Councils would lend money to the vehicle in their area and have a say in which sites were used.
  • The Scottish Government has received expressions of interest from 18 of Scotland's 32 councils, but Cosla remains concerned over the lack of evidence about public demand for mid-market rent and councils being able to borrow less money for other infrastructure works.
  • Labour and the Tories have called the scheme "half-baked" and urged ministers to reconsider.
  • The proposal has been the subject of secret talks between Government officials and the Convention of Scottish Local Authorities (Cosla) since June.
  • The Scottish Futures Trust (SFT) has been ordered to develop a detailed business plan for the NHT.
  • The NHT would be funded by local government borrowing, with no direct Government funding.
  • The plan would lease homes to families on short assured tenancies before selling them off after five to 10 years.

Statistics:

  • The proposed National Housing Trust would buy 2000 homes using almost GBP200 million borrowed by local government.
  • The Scottish Government gave local housing associations GBP17m to buy unsold new housing to rent out at affordable rates earlier this year.
  • 18 of Scotland's 32 councils have expressed interest in the NHT proposal.

Sources:

  • A paper before Cosla on Friday
  • The Convention of Scottish Local Authorities (Cosla)
  • The Scottish Futures Trust (SFT)
  • Labour spokeswoman Cathy Jamieson
  • A Scottish Government spokeswoman