Borders housing market remains "worryingly sluggish"

 by DOUG COLLIE

The millions of pounds needed to cover infrastructure costs to facilitate development on Lowood Estate, near Melrose, may have to come from the publicly funded Edinburgh & South-east Scotland City Region Deal, a report to Scottish Borders Council has suggested. 

Almost two years after Scottish Borders Council paid £9.6 million to purchase Lowood there is no public indication that private builders are about to get involved in the phased development of the site next to Tweedbank. This despite claims during negotiations for the controversial land deal that a number of builders had been knocking on the previous owner's door.

A so-called Strategic Housing Investment Plan [SHIP] to be considered by the Council's Executive later this month suggests a Lowood first phase of 30 'affordable' houses for rent, to be built by Eildon Housing Association, will not be completed until financial year 2024/25, some six years after the prime site was bought from the Hamilton family.

And there are warnings in the SHIP report that housing construction in the Borders is not witnessing much demand for new builds.

It says: "Beyond the provision of affordable housing for social rent, the Scottish Borders general house building position over recent years has mirrored the national picture to a degree reflecting a significant and concerning reduction in the number of new homes being built and brought to the market.

"Albeit there has been some market recovery elsewhere in Scotland and the UK, the Scottish Borders housing market remains worryingly sluggish with annual house sales and completions less than those prior to the financial crash. In addition, this is also evidenced by the number of new homes built on average each year. 

"In 2013-2014, 288 homes were completed, rising to approximately 370 in 2015-2016, dropping again to 309 in 2016-2017, dropping further to 250 in 2017-2018, and 2018-2019 saw just 220 houses being built. These figures include the affordable housing completions in those years. These can be contrasted to 717 new homes being delivered when the market was at its peak in 2006-2007 when only 60 of these were built for social rent, whereas 130 of last year’s 220 were for social rent. 2019/20 all tenure house completion figures are not available at the time of writing."

The only specific building programmes for Lowood contained in the Borders SHIP are those by Eildon HA - a further 25 rental properties planned for 2025/26 plus 40 more in a 'pipeline development project' - and an additional four units to be completed in 2024/25 by Scottish Borders Housing Association.

In a separate reference to Lowood the report explains: "In December 2018, the Council purchased the Lowood Estate, Tweedbank. This the only Scottish Borders strategic housing site identified in the Borders Railway Corridor and in the South East Scotland City Region Deal.

"A Consultation Draft Supplementary Planning Guidance has been agreed and has been out to public consultation which closed on 5 May 2020. However due to the Covid-19 outbreak it may be some time before it can be referred to Members for approval.

"Once agreed, the Supplementary Planning Guidance will frame further future work to be done to develop and agree a master plan for the development and develop a funding and infrastructure investment phasing package to implement this. As the situation clarifies, the Council may need to develop a Business Case in order to seek to secure infrastructure funding via City Region Deal processes."

Borders councillors were told at private meetings in 2018 that the total amount of cash needed to deliver their Tweedbank Masterplan would be some £216 million. The Lowood element would require £106 million, including £10 million to purchase the estate.

Various infrastructure costs linked to future developments at Tweedbank/Lowood were quoted at more than £21 million.

Apart from money in a 'housing pot', the City Deal allocated £15 million for the Central Borders Innovation Park. When details concerning the park emerged in August 2018 senior councillors claimed the project would deliver "hundreds of jobs over many years and add £353 million into the Scottish Borders economy".

However, a progress report posted on the City Deal website in October revealed that due to the Covid pandemic only £116,000 of the £15 million grant had been claimed. The website notes: "Variance due to Covid-19 and the inability to commence construction with the Class 4 building".