Millionaires Only

Anyone who has visited this blog more than cursorily will have twigged that I love where I live. North Berwick is not the perfect place. But having been round the world and lived abroad for a quarter-century in six different countries, I have yet to find one that is closer to perfect. And a huge part of its charm is its context—the bucolic and unspoiled county of East Lothian, together with easy access to Scotland’s vibrant capital. It has sea and sailing, golf and green space, beaches galore and an unspoiled historic heart around a High Street full of interest. What’s not to like?

Naturally, I am not alone in appreciating it. As well as the many locals, for years an influx of retirees and professionals working in Edinburgh have almost doubled the population of the county in the last half-century. That trend shows no sign of abating. Add the social profile of those new residents to a wide selection of Victorian/Edwardian quality homes and developers ever-eager to build and sell new statement homes, it comes as no surprise that a ranking of Scottish areas selling the most £1m+ homes puts East Lothian in second place, right after Edinburgh.

Which is, in many ways, good news. People buying them means engagement as well as investment in our communities is high; the council rakes in a higher council tax per skull than most of Scotland; local businesses are kept alive. But the down side is that such houses are either isolated upmarket ghettos like Archerfield or Craigielaw or middle-class tract homes all of the same design, such as Windygoul in Tranent or Lochend in Dunbar.

There is little at the affordable end. Prior to 2008, almost none were built, beyond a scattering from Homes for Life and ELHA (local housing associations). From its inception until then, ELC built a nice round number of new council houses = zero. In the same time, their stock of houses to rent dropped from almost 20,000 to under 9,000. No wonder the waiting list went through the roof to 4,000, homelessness soared and those leaving school could find little to rent in their own town that wasn’t at scalper rates (and quite often for former council houses that somehow found their way into private landlord hands).

Meantime, developers built 13,500 new private homes in the county—none affordable because ELC’s Local Plan had gagged including such a requirement. In theory, the 2008 Local Plan changed that. It demanded any development of four or more had to make 25% of the units affordable for rent. The parallel legislation that removed Right-to-Buy’s 60% top discount was intended to keep new council homes built affordable into the future.

That meant councils who had built little were no longer constrained to using sales to pay off debt, and would not lose houses they built almost immediately. East Lothian’s Labour administrations had put all their eggs in the Homes for Life basket but, instead of building 500 homes in three years, they managed 300 homes in five. So, if 25% was a reasonable proportion for affordable homes to keep communities balanced, 1995-2007 saw a piddly 3% built. The disparity across Scotland is shown in Chart 1.

Historical Housing Starts in Scotland by Tenure (source: Scottish Parliament)

Chart 1: Historical Housing Starts in Scotland by Tenure (source: Scottish Parliament)

In 2007, ELC’s new SNP/LibDem administration were fast off the blocks to address this. Despite a poor land bank available for build, in every town across the county, new council houses appeared—and quickly. In 2008-9, ELC built 29% and in 2009-10 27% of all new council houses in Scotland. Others caught up and the ratio dropped to 14% in 2011-12. But that still meant 107 new starts made both that year and the one prior.

Complementing this was a changed allocation policy. Labour had always given the vulnerable and homeless priority. This seems socially laudable but is short-sighted and poor community-building. Putting lots of vulnerable people in the one place means no social network and low ability of neighbours to start one. The policy was changed to increase allocations for those with a local connection and, more importantly, offer new homes to existing tenants with good records as a reward to them.

This still left the same number of houses available to vulnerable/homeless people. But it distributed them through existing communities where a social network already existed and there was a much better chance of support from neighbours and development into no longer being vulnerable but full members of the community. In that period, one in three new houses in East Lothian were council-owned for rent that (despite a premium) remained the second-lowest in Scotland. This started to redress the balance towards the goal of 25%.

Unfortunately, despite the major progress made 2007-12, a new Labour/Conservative administration has not seen fit to pursue this. Since they took office, new starts have declined each year as a proportion of what other councils are doing across Scotland to now stand at a risible 1.5%. The actual number of starts in both periods is shown below.

Housing Starts by East Lothian Council by Year (source: Scottish Parliament)

Chart 2:  East Lothian Council Housing Starts by Year (source: Scottish Parliament)

Is anyone else taking up the slack? No. Housing Association build is at a standstill and private developers (e.g. Cala’s Gilsland development in North Berwick) has been trying to weasel out of the 25% affordable (they sit poorly beside 5-bedroom statement homes available for £500,000).

When questioned why there is such a fall-off when private development (see Chart 1) is resurgent, the answer comes that ELC cannot afford to borrow. This seems smug and/or negligent, if not incompetent, for a number of reasons:

  1. Borrowing at current rates and rents is actually a competitive investment, given steady house price rises in East Lothian guarantees that, even on houses sold under Right-to-Buy, the council recovers its original investment and more.
  2. The previous administration showed great ingenuity in sourcing funding for new build, including grants from the Scottish Government, joint work with private developers and use of dormant property that officials had not suggested as appropriate.
  3. The local housing stock, already skewed to middle-class-upwards prices is beyond the reach of average wage earners who form the bulk of locally employed people, let alone the reach of those on minimum wage
  4. The resumption of growth in the waiting list implies growing social cost, as well as real cost in homeless accommodation and housing benefits to private landlords.
  5. ELC’s borrowing limit has not been reached and there are no penalties for exceeding it
  6. They banked £7m of public money into reserves last year, £1m of which they lifted from a profitable Housing Account

It is amusing, but deeply depressing, to watch ELC’s 3-member Tory group tail wag the 10-member Labour dog on this. But both are complicit in encouraging developers to build ever-more, ever-less-affordable houses across the county—and little else. The result may delight existing and would-be millionaires, but it forces more and more local people into the ‘vulnerable’ category, about whom they profess to care so much.

Cynical as I am about Labour’s motives, even I can’t believe they are doing it in their increasingly desperate quest for votes. But what other rational explanation is there?

About davidsberry

Local councillor, tour guide and database designer. Keen on wildlife, history, boats and music. Stood for the Scottish Parliament 2011; lost by 151 votes.
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