09. November 2004 · Comments Off on Rural Housing Problems 2 · Categories: Housing

We know about problems with the planning system and we know about the problems of land availability. For those folk who don’t want to rent from a housing association but want to buy a piece of land on which to build their own house these problems are real enough. But just when you think they’ve been solved, along comes another spanner in the works.

The village of Laggan in Inverness-shire has a reputation for getting things done and housing has been high on their agenda. However, things are not always simple and even when you think everything is going right, you get walloped by the unexpected. This is a story of the unexpected.

Campbell and Sheena Slimon own Breakachy Farm. Campbell is well-known in farming circles and Sheena has been a stalwart in local community activities for years. She is now the Highland Councillor for the Badenoch west ward. They bought Breakachy Farm in 1987 from the MacPherson’s of Glentruim Estate. In recent years, a local couple were in search of a plot of land and the Slimons agreed to sell a 3877 square metre plot for 20,000 GBP (considerably less than they could have achieved on the open market). It took 2 years to obtain planning permission and the sale was imminent. Then the unexpected happened.

Breakachy Farm was sold to the Slimons by Feu Disposition. In other words, the owners of Glentruim Estate, although they’d sold the farm, remained the Slimon’s Feudal Superiors. As Superiors, they had, among other rights, a right of pre-emption which is to say that if the Slimons were ever to sell any part or all of Breakachy Farm, the owners of Glentruim would have the right to purchase the land at a price equal to that being offered by the purchaser. In 1997, Glentruim Estate and the rights associated with the estate (including those of Feudal Superior) were sold by the MacPhersons to Roeland Hendrik Jan Groenendyk for 405,000 GBP. The Estate by now consisted of a mere 22 ha including Glentruim House.

Thus when Roland Groenendyk was notified of the sale of the housing plot, he exercised his right of pre-emption and bought the land for 20,000 GBP. Obviously this caused huge upset and the Laggan Community Association wrote to Mr Groenendyk to express their concern. In reply, he wrote,

“We were also looking for a building plot for a couple of years now, for
a young family with 2 children, who wants to settle here in this area.
So we are very pleased to get the opportunity to help another young
family and therefore will proceed with the purchase.”

However, the real motives are now apparent. Mr Groenendyk has put the plot of land up for sale at offers over 125,000 GBP. The land is being advertised for sale.

What appeared to be an alternative gesture of goodwill towards a family in housing need turned out to be no more than an exercise in profiteering.

What can be done? Well, on 28 November 2004, the Feudal system of land tenure in Scotland will finally be abolished. The Abolition of Feudal Tenure etc. (Scotland) Act does allow for the retention of certain types of title conditions including rights of pre-emption. We do not know whether Mr Groenendyk had taken steps to preserve this right or whether, had the Slimons waited a couple of months, the right of pre-emption would have been extinguished. What is clear is that many existing rights of pre-emption will disappear on 28 November BUT EQUALLY many will remain. When land is sold by ordinary dispostion (rather than by a feudal disposition) the abolition of feudalism has no impact.

So, celebrate the end of feudalism on 28 November, but still be prepared for the unexpected.

27. October 2004 · Comments Off on Rural Housing Problems 1 · Categories: Housing

Jim Hunter, the historian, journalist and ex-Chair of Highlands and Islands Enterprise was on the Lesley Riddoch programme on Radio Scotland this week. He rightly flagged up the housing shortage as a critical issue for rural Scotland. The difficulties associated with expanding the housing stock are many and range from the price of plots to the straitjacket of the planning system. The difficulties pose acute problems for local folk wanting affordable homes and for others who want to settle and work in rural areas.

In response to this challenge, a landowner from Fife phoned in. He argued that private landowners were willing to help in the provision of affordable housing and, if they could access government housing support grants, could construct houses at around 20% less than Housing Associations do. This sounds all fine and dandy and in the fast-paced environment of radio debates, Jim conceded that any new and innovative solution to the problem was welcome.

But what is this problem? There are actually two problems. The first is the provision of affordable housing in rural areas – usually for local people but also for key workers (nurses, doctors, teachers etc.). The second is a much wider problem which is the provision of land for individuals to build their own homes – both locals and those moving into rural areas.

The solution that the landowner from Fife was hinting at was to address the first of these. Indeed he went so far as to say that landowners in general are NOT willing to sell core assets. This is not strictly true. Many old barns and housing sites are provided by private landowners but they are extremely limited in supply and usually cost a fortune. For example, an old steading in Strathspey was recently put on the market at offers over £150,000 (Aug 2004). A single building plot 18 miles from Edinburgh is advertised in the Scotsman this week at offers over £110,000 (Sept 2004). These prices (and the average £30-40,000 for an unserviced plot) are a consequence of the limited supply of land plots for sale and the restrictions imposed by the planning system.

Going back to our friend from Fife – he did not offer any solution to the second problem, the one graphically illustrated by the figures above. And yet this is just as important as the first problem. Indeed, given Jim Hunter’s desire to see economic development it is imperative that those who want to live in rural areas can do so easily and affordably. It’s also worth noting in passing that the reason private landowners are so very keen to get their hands on the public money given to Housing Associations for the construction of affordable homes for rent is that the landowners end up owning the asset! In the case of Housing Associations of course, the Association owns the asset in perpetuity.

This fixation with affordable housing for rent (important though it is) is allowing landowners to plead that if only government were more flexible, they could do so much to help. It’s a theme being taken up this coming weekend by Andrew Bradford of the Scottish Rural Property and Business Association at the Scottish Federation of Housing Associations rural housing conference in Nethybridge

The second problem is acute and poses long-term difficulties for enterprise in rural areas. Certainly, as Jim pointed out, the planning system needs shaken up. it is partly responsible for the restricted supply of housing consents but this only serves to exacerbate landowner’s existing unwillingness to release land. Remember that 350 landowners own over half the privately-owned rural land in the country. it serves them nicely to have a restricted supply of consents as it pushes the prices up.

Hunter’s main drive is to attract people into the area. These folk are not likely to be on a local authority housing list. They are, like 60% of the population, aspiring to own their own home. Planning laws remain a problem but land release is a bigger issue. I know – I’ve tried (not under my own name as that might influence matters unduly but through a third party). Here are some of the responses I received.

“Our current policy is only to sell land that does not geographically fragment the estate.”

“The estate releases land for development purposes from time to time”

“It is not estate policy to sell off parcels of land.”

“On the whole we are not keen on selling bits of land ad hoc.”

The bottom line is that landowners are not very willing to sell plots of land and where they are they almost always only sell when they have obtained planning permission. In other words the market in land for folk to build their own houses on is a quasi-monopoly over great tracts of rural Scotland with landowners releasing land only when they like and on their terms. It’s like OPEC and the oil supply.

One landowner wrote a piece in a national newspaper arguing that there was no shortage of land in the Highlands of Scotland and that it was cheap – around £100 per acre. So I wrote to him asking whether I could buy one of his 8000 acres. For the purposes of the exercise I didn’t much mind which acre. But no – when it came to living up to his claims he was suddenly unable to sell me anything. Although he did point out helpfully that he had some plots in the village available at £30,000 per quarter acre plot – £120,000 per acre or 119,900% more than he had originally claimed!

So until landowners come up with some solutions to rural home ownership I would treat their claims to be ready and willing to help with a large dose of salt.

As a postscript to this – read the conversation with a Norwegian on page 192 of Ian Mitchell’s new book, Isles of the North. In Norway you can get hold of land for building a house at agricultural prices plus the cost of services.