Scottish housing chief sets out challenges facing sector

By Scott Wright
Deputy Business Editor, The Herald

This article was first published in The Herald. The newspaper article is linked here.

HOMES for Good has entered 2022 with confidence after safely negotiating the slings and arrows of the pandemic thus far. But there can be little doubt that, between a much-publicised housing shortage and proposed legislation to shake up the private letting sector, the social enterprise is facing a challenging environment as the new year unfolds.

Homes for Good has the broad aim of helping tenants access quality housing while protecting landlords’ investments. Susan Aktemel, who established the business in 2013, said it has managed to keep growing despite the uncertainty thrown up by the pandemic during the last 20 months.

Although its rate of growth dipped last year compared with the years prior to coronavirus – expanding by five per cent versus a more typical 20% – the business raised more investment and is hot on the acquisition trail for more properties
to add to its portfolio. Declaring that “we have come through this in a fairly healthy way”, Ms Aktemel said “we didn’t shrink, we didn’t lose money, and we are starting to grow again this year”. She added: “I am proud of how we have navigated through it all as a team.”

Homes for Good currently lets 520 properties, owning around 270, and has ambitions to increase that to 1,000 homes under management by 2025. It will be helped on its way by an investment of £3.5 million that it secured from Social and Sustainable Capital, a specialist provider of finance to charities and social enterprises, in December.

The investment is the second tranche Homes for Good has received from Social and Sustainable Capital, following a £2.85m loan from its Third Sector Investment Fund that helped it buy 53 properties in Glasgow in 2018. The latest funds will be used to invest in a further 50 properties in Glasgow and across the west of Scotland.

Ms Aktemel, whose firm also received investment of £3m from Big Issue Invest in September 2020, is already searching for property, but she admits it is not easy in a housing market where demand is now comfortably outstripping supply.
While market had been broadly “stable” during the early lockdown days of the pandemic, Ms Aktemel said it began to really heat up last year when a “pent-up” demand was released as people began to move house again. She is not sure of the precise reasons, but speculates some of the demand has been driven by people seeking bigger homes because they are spending more time working from home.

Such has been the rise in demand, Ms Aktemel notes, Homes for Good will now receive around 100 enquiries for a one-bedroom property it has available to rent, compared with around 30 before the pandemic. “There are a lot of different factors at play that are making the market quite a challenging place for people, particularly for
people on lower incomes,” she said.

“It feels like there has been a reduction in properties that are available, so demand is far outstripping supply and of course market forces mean [when that happens] the prices creep up.”

That Scotland is facing a chronic housing shortage is not news. But it does seem the deficit has been exacerbated by the pandemic. Asked if enough was being done to address the housing shortage, Ms Aktemel replied:
“If you look at the more social end of the market, there is not enough social housing being built, and there is just not enough money available. I think the Scottish Government is very aware of the situation, and from what I am seeing they are doing as much as they can.
“There are lots of people who would happily be in the social housing sector who are now in the private rented sector.”

But that is not the only part of the market where the volume of housing stock is lacking, Ms Aktemel explained. There is a shortage of properties available for students in major cities, while in rural areas there is also an under-supply of affordable and social housing. Another factor has been the explosive growth of Airbnb properties, which is diverting stock into the hospitality, leisure and tourism industry. Ms Aktemel welcomes the legislation being brought in at Holyrood to regulate the short-let sector, which has proved controversial with the tourism industry. She said:
“Although we recognise there is a role for self-catering accommodation, when it gets to the point it’s reducing the supply of homes, which is a basic human need, that becomes problematic.”
Not every proposal emerging from Holyrood at present gets the thumbs-up from Homes for Good though.

Ms Aktemel fears that a proposed new deal for tenants in the rented sector, part of the government’s Housing To 2040 strategy, could have “unintended consequences”. Unveiling the plans last month, the Scottish Government said its proposals would provide tenants with stronger rights, greater protections against evictions and access to greener, higher quality and more affordable housing.

Ms Aktemel said: “Housing To 2040 is an ambitious programme to make the whole housing sector fit for purpose for the changing demographic in Scotland. “I am, however, concerned that current proposals now being taken forward by Patrick Harvie, especially relating to rent controls and ambitious energy efficiency targets, will result in unintended consequences of good landlords leaving the market. Unless enough new social housing is built this will create even further pressure on supply for people who need to homes the most.”

Six Questions
What countries have you most enjoyed travelling to, for business or leisure, and why?
I love Spain, and in particular Catalonia. I lived and worked there every summer during my university years, and it has felt like home since I first went at 17. I love the languages, the food, the people, the architecture, the sun – it is my place. Barcelona is as familiar to me as Glasgow, I know almost every corner of it, and this year I will be
spending time living and working there.

When you were a child, what was your ideal job? Why did it appeal?
I was always going to be a shopkeeper -I started in my nana’s pantry, with selling her back tins of fruit and soup, and my home-made rose perfume from the garden. The thrill of the sale has never left me!

What was your biggest break in business?
can’t think of one – I have had several – but they always boil down to the same thing – someone believing in you, backing you and making a connection or introduction on your behalf – and that being the next big opportunity that you need to grab. With Homes for Good it was my dear colleague, friend and fellow Director Alex Pollock, connecting me with Richard Brass, our first London investor in 2013. That changed everything.

What was your worst moment in business?
A malicious, anonymous complaint about me to a funder many years ago. I’ll never forget the sick feeling in my stomach when I saw it. But I also remember the way my board and advisors immediately came around me like an iron wall to respond to the complaint, which of course was unsubstantiated.

Who do you most admire and why?
That’s a hard one – I am inspired by many people. I admire the increasing number of women in political leadership roles – Jacinda Ardern is my favourite I guess, but also Nicola Sturgeon, Ursula von der Leyen, Kamala Harris – I watch closely how they operate and communicate, and try to learn from that.

What book are you reading and what music are you listening to?
Music – I love my 80s collection of every album I ever had, on constant shuffle, including the old Spanish and German tunes I collected in my travels in the late 80s. I am reading a couple of books a week at the moment, and my current one is How to Predict the Unpredictable – The Art Outsmarting Almost Everyone by William Poundstone.