Few would dispute there are pressures on rural housing in Scotland. “Housing has become unaffordable for many and as a nation we are not developing enough homes to meet need,” was the recent stark assessment of Savills and the Scottish Land Commission.[1] The crisis affects both private and affordable housing and all types of tenure, according to their report.
Many of the places and communities most impacted are tourism destinations. On some of the most popular West Coast islands, for example, 40% of housing stock is said to be used as holiday homes or self-catering holiday accommodation.
Collaborating for change
Policymakers and local authorities face growing pressure – including from rural employers – to address this crisis. As a result, we’re seeing creative and collaborative solutions emerging, with landowners, developers, community development trusts, councils and rural businesses coming together in various combinations to provide rural housing.
Projects range from small island developments involving a handful of homes to new ‘communities’’ with dozens or even hundreds of homes envisaged; possible routes for landowners include selling, gifting or developing themselves. A game-changer has been the availability of grant and funding mechanisms, such as the Scottish Land Fund.
The practicalities
For landowners and estates, the provision of land for housing can be interesting on different levels, such as:
- an option for diversification and succession planning
- an opportunity to sustain communities and contribute to their economic and social fabric.
Whatever the motivations of individual landowners and the incentives available to them, the practicalities can be complex.
On the financial side, the availability of grants has facilitated housing projects, but the processes and conditions are far from straightforward. Land pricing and relationship management can also be demanding. Housing projects often involve a large cast of stakeholders with different priorities, resources and levels of expertise. There’s a need for experienced advisers to provide not just technical knowledge but the contacts, contextual understanding and perseverance to deliver the deal.
The legal considerations
From our own experience of working in this area, including a number of projects completed or in the pipeline, there are some key legal steps that landowners can take to facilitate housing projects.
Firstly, those who have not yet registered their land in Scotland’s Land Register should think about doing so. It will ease the process of negotiating a land contract sale with developers and can help to prevent delays.
Secondly, it is advisable to check title deeds in case there are adverse title conditions that would hamper or prevent development. Doing this at an early stage could ease negotiations and prevent extra cost.
Thirdly, landowners who are selling only part of their land should get good advice about what rights will need to be reserved in order to ensure the future marketability or use of their remaining land. This could include the ability to hook into new access roads and / or service apparatus being installed on the land (and taking into consideration appropriate obligations for maintenance, repair and renewal.) This is essential to preserve flexibility for yourself and future generations, including the option for further land transfers for local housing.
A number of factors – from political pressures, new funding sources and rising community engagement – are likely to spur more landowner involvement in rural housing projects. Although it may not be the simplest or fastest means of diversification or succession planning, it is one that could benefit both you and Scotland’s rural communities. When looking at your options, it’s certainly one to consider.
[1] “The Role of Land in Enabling New Housing Supply in Rural Scotland” (2020).
This article appeared in the latest edition of LandBusiness Magazine from Scottish Land & Estates
