Isles of Scilly Housing Development Study

The Housing Advisers Programme provided the council of the Isles of Scilly with funding for consultancy support to aid in unlocking delivery of affordable and key worker housing on the islands.

The aim of the work was to support a practical delivery strategy for key worker/affordable housing to meet the needs of the local community on the islands. 

The strategy provides an analysis of the policy context for delivery; an assessment of the demographic, market and delivery issues affecting the provision of affordable and key worker housing ;a capacity and design assessment of four allocated sites as well as identifying key issues, recommendations and next steps for the council to take in its journey towards delivery.   

The challenge 

The housing market on the Isles of Scilly is unique, with 30 per cent of the housing stock made up of second homes and holiday lets. This limits the housing available for local households, residents and key workers, while also creating an issue of affordability by limiting the market and driving up house prices. This causes an acute housing dilemma, whereby the demand for housing is not met by the current housing supply. The lack of housing creates a constraint on investment and housing growth on the islands, with repercussions for recruitment and retention of key worker staff. This has been identified in the council of the Isles of Scilly’s Local Plan as a key challenge for the islands with the ambition to deliver 105 affordable homes by 2030 set in order to address this problem.   

However, the model for delivery of affordable homes on the Isles of Scilly is complex, due to the unique context of the islands and the constraints this creates. As well as the difficulties arising from the islands’ location and the ability to easily transport materials and labour, there is also the issue of affordability, with costs of development estimated at 50% higher than mainland construction. Because of this, registered providers and developers have been put off the housing delivery programme due to the limited profit margins; especially for delivering affordable homes. The council is therefore leading on the delivery of affordable and key worker homes on the islands.  

The solution

This study will support the council in funding bids to de-risk and unlock sites for development. The unique characteristics of the islands have also been identified through the study, and this can be used to explain to potential funders or registered providers why generic housing requests do not fit into the context of Scilly. Of note is the recognition that the nature of the local private sector differs from elsewhere and the model of cross subsidy appears to have less certainty on the islands. This study demonstrates how key worker accommodation might be delivered on the islands to support integrated health and social care and the One Public Estate project. 

The study has verified the councils assumption that direct leadership in delivery from the council is required, it has also signposted opportunities in relation to establishing a Community Land Trust to deliver homes for the local community. 

The impact (including cost savings/income generated if applicable)

The LGA funded Housing Development study has allowed the council to undertake initial desk top studies of the sites selected for analysis. With initial illustrative layouts provided, and suggested next steps; the study has provided a starting point for the delivery of key worker housing as part of the wider Housing Delivery Programme. The study has been important in de-risking sites prior to acquisition.  

The Housing Development study has allowed the context of the islands to be explained to potential partners and funders, increasing the prospect for new homes being built on the islands.  

The opportunity for the establishment of a Community Land Trust has been suggested by the study and the council are looking into the logistics of this format for delivery as well as, self and custom build prospects. This provides an alternative to traditional cross-subsidy.  

The project team worked closely with the Health and Social Care Integration Programme to ensure the delivery of affordable homes meets the need for key worker accommodation, helping inform the Outline Business Plan. 

The study has been important in providing learning and knowledge to give confidence to a relatively inexperienced and small delivery team. 

In the long term, the study will have supported the development of key worker and affordable homes on the islands. 

How is the new approach being sustained? 

The study informs the council's Housing Delivery Project. The study has provided focus to how delivery might be achieved. This has led to a successful funding application being made to Homes England through the Community Housing Fund for additional resource in the initial phases of project.  

The signposting from the report to other funding including the Small Sites Fund will also be followed up. Once the sites and the program get past the concept stage the team will be expanded as part of the council's capital program. The study will be an essential part of the justification for significant direct investment by the council in housing delivery.  

Lessons learned 

A variety of lessons have been learnt with regards to the delivery of key worker homes and affordable housing on the islands .These include independent verification that:

  • a step change in Housing delivery is needed to address affordable and key worker needs
  • relying upon windfall development is unlikely to meet the scale of need or type of housing required
  • delivery through traditional S106 approach will be inefficient considering the limited opportunities and remains uncertain for larger sites due to concerns around market capacity and sales risk and a limited range of private sector partners.
  • to meet key worker housing and long-term requirements, ambitions for the islands there is a role for a greater range of housing tenures and unit size
  • the development of a Community Land Trust and the use of Self and custom build provide an option to support a longer-term option to deliver the local ambitions of the community 
  • any development for affordable and /or key worker housing will only be viable with cross subsidy or public subsidy – an opportunity self or custom build units could provide
  • the Carn Thomas site will include abnormal costs of further site clearance.   

Contact: Nicola Stinson