Two tier housing market in the Borders

THE combination of fewer houses for sale in the Borders and the prices being lower than nearby Edinburgh, East Lothian and Midlothian means that people from these areas are being attracted to move into the region but the knock-on effect of this has been to push prices beyond the reach of over 50 per cent of Borders households on relatively lower wages.

A recent Borders Housing Needs and Demand Assessment (HNDA) revealed that “55.5 per cent of all households in the Scottish Borders have incomes below the level required to secure a 100 per cent mortgage on an entry-level property”, pushing those households into the rented and affordable housing market instead.

Supply in the local housing market adjusted sharply to the economic downturn - the number of house sales has gone down by 50 per cent and new build sales have decreased by almost 40 per cent and the new Scottish Borders Local Housing Strategy acknowledges the effect this is having on the local population.

In a report presented to Scottish Borders Council’s executive this week it states: “Pressure in the housing market has actually increased as evidenced by continuing price increases (26 per cent in Berwickshire) - there is less supply, less finance available to access market housing, but demand and need continues.

“In-migrants have higher purchasing capacities than Borders existing households which in practice means that the Scottish Borders has a two-tier housing market.

“Supply in the private renting sector has increased from eight per cent to 13 per cent of all households between 2001 and 2007/8. The cost of renting in the Scottish Borders has also increased” - Berwickshire seeing the highest rent increases of 50 per cent between 2002 and 2008.

All this has provided a very clear path for the region’s new five year housing strategy, to take us up to 2017.

Firstly the council and its partners need to work out what they can do to support recovery of the housing market and increase the supply of new affordable housing.

Private housing developers are required to provide 25 per cent of all new build houses as affordable housing, but it is recognised that more needs to be done to increase the supply of market housing which is affordable for the local population.

Making best use of the existing housing stock is seen as essential because “the short /medium term horizon for public housing investment in the UK and Scotland is bleak”.

Over the next five years it is estimated that as households in the region get smaller and older, 564 new houses will need to be built in the Borders to meet demand (103 of them affordable), but in reality that figure is expected to fall short at 525 (81 affordable houses).

Improving housing conditions, addressing the housing needs of the increasing numbers of vulnerable people and tackling and preventing homelessness are also high on the council’s housing agenda.

The expected 55 per cent increase in the number of people in the Borders aged between 65-74 years and a 102 per cent increase in people over the age of 75 is a particular challenge for the region bringing increased demand for support services, home adaptations and specifically designed housing.

Recognising the challenge ahead of them, Councillor Ron Smith, executive member for social work said: “Housing is not just a matter of bricks and mortar but is an integral part of the physical, economic and social character of the Borders.

“Specifically, accessible, warm, safe, affordable housing, attractive environments and a sense of place can contribute greatly to meeting Scottish Government’s wider aims of tackling poverty and health inequalities and building confidence and capacity in communities. This will enable Borderers to reach their full potential.

“These issues are challenging enough, but we are also operating at a time of major changes in the financial and economic worlds.”

Speaking about the newly published Local Housing Strategy document, Councillor Smith added: “It is intended that this document will provide a focus for consultation to enable the council and its partners to engage with individuals, organisations and the wider community in order to develop their vision and proposed actions for the next five years.”