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.