The Highland Housing Challenge Summit

Last month saw the inaugural Highland Housing Challenge Summit gather in Aviemore, convened by the Highland Council and Prosper . The event brought together key players in the housing sector, with an action-focused objective of realising the housing opportunities which will emerge from the expected economic development of the region in the coming years.

Building more homes, of the right type in the right places, will be a critical enabler to unlock and maximise this opportunity. ?At the Bank we recognise not just the commercial opportunity but also the potential for positive social impacts. This means delivering new homes and improving places in a way that benefits existing communities and businesses across the region.

Given the scale of the housing opportunity and challenge, it will be critical to attract private capital. To attract this investment, investors need to have confidence there is a long term, shared vision for the region which will unlock the delivery of economic growth opportunities. They need to be confident that the jobs and people are coming.

To attract investment at scale we also need commercial investment models with the right risk profile to match investors’ appetite, and with the potential for replication across locations. And as an obvious point, models need to be viable, which we know can be challenging in the Highlands & Islands where build costs can be significantly higher than in other parts of Scotland. In this context considering scale and aggregation of projects will be important.

Critically, there needs to be a viable supply chain which can deliver. Without a customer pipeline, supply chain businesses cannot secure the investment they need to grow. And without this supply chain growth, costs won’t come down and pipeline viability will remain challenging.

As part of the Bank’s response, we have formed a new market creation function to work with others across the public, private and third sectors to help develop?solutions that can attract commercial investment and maximise positive economic, social and environmental impacts. As a commercial finance provider, impact investor and public body, we believe that the Bank is uniquely placed to play this important role.

The Bank is keen to create partnerships, aggregate projects and deliver mixed tenure opportunities. Collectively we need to find new models which enable every pound of grant and public subsidy that’s available to crowd in as much additional private capital as possible, to maximise impact. One idea we are currently exploring is the use of joint ventures, with aligned public, private and third sector partners coming together. Bringing together their skills, experience and critically the land, with a willingness to work together over the long term to share risk and rewards.

The Summit was not just a conversation starter but a call to action. There’s a huge opportunity for the Highlands, and for Scotland, that’s there for the taking if we can come together to realise the potential before us.

Susan Campbell , Director - Market Creation (Place)