HM Insights

Post Referendum Impact on Housing in Scotland

In the early hours of Friday 19 September 2014, it became clear that people in Scotland had voted to remain part of the UK. No less than 85% of the electorate took part, with 55.3% of those saying No to independence. This result will have major implications across Scotland and the UK as the debate immediately moved on to constitutional reform and greater devolution of powers. One area which is likely to be affected is housing and welfare policy in Scotland.

The property market in a wider sense has already seen the effects of a No vote, with Scotland now beginning to benefit from the general economic recovery that has been a driver for activity in other parts of the UK. Transactions which had stalled because of the significant uncertainty surrounding the constitutional future of Scotland are now set to complete. There is also comfort for those involved in transactions which completed pre-referendum but which were conditional upon a No vote and entitled parties to terminate arrangements if the result went the other way.

In the lead up to the referendum, the leaders of the three main UK parties pledged to devolve more powers to Scotland in the event of a No vote and set down a timetable which would see the first reading of a new Scotland Act by Burns' Night in 2015 (25 January). These proposals include increased tax-varying powers for the Scottish Parliament in relation to areas such as land and buildings transaction tax and the devolution of powers relating to housing benefit.

Such devolution of powers in relation to housing benefit could give the Scottish Parliament the power to scrap recent controversial amendments to the welfare system introduced by the current UK coalition Government, including the so-called "bedroom tax". However, if housing benefit and related arrangements are devolved to Scotland, this would significantly undermine the proposals to introduce universal credit.

Even with increased devolved powers it is unclear if the Scottish Parliament would be able to set different levels of benefit in respect of matters such as unemployment and pensions, which would be seen as more favourable to people in Scotland over those in the rest of the UK.

The Scottish Federation of Housing Associations has highlighted the need for change in the current division of powers and policies on housing and welfare across the UK. For example, investment adds to housing supply and this is already devolved to the Scottish Parliament whereas welfare, which supports the majority of people who require social housing, is reserved to Westminster.

The coming months will see more detail emerge in relation to the precise nature and extent of the so-called "devo max" powers. Whatever change occurs, it is hoped that the estimated 185,000 people in Scotland waiting for social housing will see a change for the better.