Harming the housing market - John McLellan

An artist's impression of the proposed new homes at Henderson Place.

On the face of it, the rejection by Edinburgh planning councillors of an application in which a builder tried to argue against including affordable flats in a small city centre development was justifiable.

​After all, the rules are quite clear, that 25 per cent of all but the smallest housing projects must be affordable, so the bid by a developer to simply pay £600,000 instead of keeping ten of a 42-unit block on Henderson Place below normal market prices was pushing it.

But with construction costs alone now around £280,000 a unit, there is not much which can be classed as “affordable” and conscious of the housing shortage, officers accepted the argument that the development was not viable with an affordable element and recommended approval of the alternative payment.

The developer was accused of trying to “wriggle out” of its commitment, but compelling house builders to accept losses just means fewer new homes of any kind.

There are no easy solutions, but sticking to principles and defying reality is not going to make things better, while the waiting lists and prices rise higher and higher because supply can’t keep pace with demand.

At a time when Scottish Government market interference is depressing housing investment even further, it seems that politicians locally and nationally somehow manage to get it wrong with alarming regularity because of a stubborn refusal to accept the current economic situation.

Too many still think ideology can somehow trump market forces. It was called the Soviet Union and that didn’t end well.