Go Back

View from the Street: We need homes at the heart of Scotland’s cities

John Cumming

Senior associate

Next time you are in the centre of Glasgow, look up.

Perched above the city’s famous thoroughfares are rows of architecturally notable buildings, testament to the city’s gilded past.

Many of these wonders of blonde and red sandstone, previously hubs of commerce and retail, now lie empty and in need of serious investment. According to Glasgow city council, there are more than 400 pre-1960 commercial spaces in the city centre which are currently “obsolete” and primed for conversion, many of which would be ideally suited to residential repurposing.

These resplendent buildings need not simply be a reminder of Glasgow’s past; they are a key piece in solving the jigsaw puzzle which is Scotland’s housing emergency.

There’s an ongoing conversation around how we can bring more empty homes back into use. Recent research has suggested that there are around 93,000 homes lying empty in Scotland – with a combined value of £18 billion. Tapping into this existing capacity is part of the solution to Scotland’s housing crisis – but we must not overlook the significant capacity which exists within commercial property across Scotland.

There is a whole generation that is currently struggling to get a foot on the housing ladder, many of which would jump at the chance to live in a dynamic, central location, with excellent access to local amenities. I’ve previously written about the steps Glasgow is taking to increase its abnormally small, city centre population. Doing so would boost the economy, while creating cohesive and less car-dependent inner-city communities.

So, what’s stopping these empty commercial buildings being converted into homes?

We must first understand why these buildings are empty. Circumstances will differ for individual properties, but general themes are at play.

Firstly, the pandemic and the move towards hybrid working means there is not the same demand for large, traditional offices, with many employers now looking for smaller and more agile spaces for their staff. While some older buildings in the city centre have been able to accommodate this, others have been left redundant. It’s also the case that many of these buildings became vacant long before the pandemic. Establishing the ownership of empty commercial spaces can often be difficult, but its undoubtedly the case that many will be lost in massive property portfolios, without plans for renovation.

Developers are also faced with a VAT-related anomaly when it comes to renovating older buildings or converting commercial spaces into homes. If they decide to construct a completely new block of flats, or an expansive suburban development, they will pay zero-VAT. However, if they take on a Victorian office block, with the intention to convert it into apartments, then VAT will be charged at 20%, with the rate sometimes reduced to 5%. Even with this reduction, it remains the case that developers are incentivised to create new homes from scratch, rather than convert existing buildings.

Creating new city centre neighbourhoods, with less of a reliance on cars, is vital if we are to address the housing crisis and meet our climate obligations. Removing VAT on commercial to residential conversations is an obvious way to support both objectives.

Planning reform also has a role to play. Currently, securing permission to change the use of a building from commercial to residential can be a laborious task. Giving local authorities the power to relax this process, in a targeted way, could help to turbocharge local housing ambitions.

Building more homes, across all tenures, and in a variety of locations, is the solution to the housing crisis. We must not lose sight of the vast housing potential that exists among the hustle and bustle of the inner city.

As noted above, the pandemic was the turning point in a much longer-term change in the way we interact with our city centres. As the trend of hybrid working continues, and our high streets continue to see lower levels of footfall, we have an opportunity, and an imperative, to breathe new life into Scotland’s cities, with homes at their heart.