Newsflash: A discussion of the housing land market in Scotland

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The Scottish Land Commission recently published its discussion paper on the housing land market in Scotland.  The paper – the first in what is due to be a series of “Land Lines” papers on key land issues in Scotland – considers how the public sector could intervene to improve the operation of the land market and increase the supply of land for new housing.

Written by an economist who has published extensively on issues of land, housing, financial reform and inequality, the Commission has made clear that the views expressed in the paper are the author’s own and do not necessarily reflect those of the Commission. The intention is demonstrably to stimulate public debate, as part of the Commission’s wider strategic objective to ensure that the ownership and use of land delivers greater public benefit.

The paper highlights some of the problems within the housing land market in Scotland, suggesting that a contributing factor is an expanded mortgage market and flexible credit supply combined with a fixed land supply, which results in higher house prices.

The author concludes that options to improve the supply of land for housing could include public land value capture; compulsory sale orders in respect of land that is left vacant or derelict for a long time; a new housing land development agency with the power to buy, develop and sell land; tax reform to incentivise the productive use of land; and greater market transparency to assist market participants, researchers and policy-makers. No changes to the mortgage market are suggested or anticipated.

The Commission’s chair Andrew Thin said: “Land for housing and development is a key priority area of work for the Land Commission and this paper has helped by not only contributing to the debate but also by helping to identify important knowledge gaps.” He invited views on the paper by contacting the Commission directly, through its blog or at one of its events. He confirmed that the Commission is also continuing the discussion with key organisations and individuals in the sector.

Walker Morris will monitor and report on key developments.