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Saturday interview SIMON BAIN
Private housebuilding fell last year to its lowest level in 30 years, official figures revealed last month. "If this downward trend is not arrested, the long-term social consequences could be severe and far-reaching," says the man who spent a decade at Miller Homes and now heads up the industry body representing 95% of Scottish housebuilding.
When the Council of Mortgage Lenders in Scotland published figures in August, Mr Hogg said an overall rise in house purchase lending in the second quarter was welcome, but warned that first-time buyers were still having to find a 20% deposit and home-movers one of 30%. "Large deposit requirements have locked many credit-worthy, would-be buyers out of the market which is why we are working so hard to launch our innovative MI New Home scheme as soon as possible."
MI New Home, launched this week, six months after a similar launch in England, will underpin newbuilds with a Scottish Government guarantee and indemnifying lenders against mortgage defaults.
"It could potentially be worth about £1 billion to the economy over three years," Mr Hogg says. The 6000 new homes should ease pressures in the whole market and create or safeguard 23,000 construction jobs and more than 650 apprenticeships.
"It is significant on many levels," he adds. "First of all it's the human element. We have heard some heart-wrenching stories about people who just can't get deposits together. It leaves people in a real tricky situation and puts pressure on families and on the rented or social housing sector. But from a positive angle, the work we have done in the past suggests every new home creates four jobs and every nine homes means one apprenticeship as it trickles down the supply chain."
Housebuilding, Mr Hogg stresses, gives a direct boost to local economies. "We don't import jobs by and large and we don't import materials – it's an excellent job-creation industry."
MI New Home is not limited to first-time buyers. "It's wrong to assume that people higher up the chain have a lot of equity. Property values have dropped and second and third steppers on the ladder have found they don't have the equity they once thought they had," he says.
The mortgage drought is only one half of the equation, Mr Hogg adds. "Traditional commercial finance has become more and more challenging. We need innovative finance solutions such as the National Housing Trust and similar financing models – and that encapsulates what Homes for Scotland is going to be about in the future."
The new industry leader hails from Worcestershire and was trained as a structural engineer. He took an MBA while working for glassmaker Pilkington and spent his early years with materials group Redland, a supply side experience which helped his credentials for the current role.
Mr Hogg joined Edinburgh-based Miller Homes in 1998 and was UK marketing director when the crash came, hard on the heels of Bank of Scotland buying a major stake in Miller Group from family members, in an apparent vote of confidence in the outlook.
He recalls: "It's amazing how it went from a high, getting the bank involved, in a rapid amount of time - and I was one of the casualties."
Unfazed, Mr Hogg set up a consultancy, set his sights overseas, and was called in to help prop up huge developments in Abu Dhabi which had stalled when the crash hit the Middle East and buyers stopped paying. "Our task was to persuade these people to consider becoming landlords. We set up some research projects for the home-building industry - then this opportunity came along."
He was asked to head an organisation he had known at Miller, with a 22-strong board which he says means "people feel their voice is heard and they get the opportunity to hear first-hand what is going on".
But the nature of the trade body has changed. "In the last two or three years it has been tactical, roll your sleeves up, deliver initiatives that will have short-term positive impacts. I see us operating in that space for the foreseeable future and it maybe involves us changing our skill sets. We need to be able to have meaningful conversations with institutional investors, acting as facilitators, working on behalf of some of our small and medium-sized companies that don't have the knowledge or expertise to go down this route."
Mr Hogg has recently finished a series of roadshow events for HFS members round the country, encouraging them to look at partnerships and how they can operate in the new environment.
But while funding takes centre stage, there is a wider agenda. Mr Hogg says: "Whilst we are working hard to launch the indemnity scheme to try and assist those locked out of the market, we desperately need further Scottish Government intervention to ensure that the planning system operates effectively and efficiently. We also need it to consider adopting innovative ways to deliver the low carbon agenda without impacting on housing costs and output."
Despite the intentions of central government, planning at local level can still be disconnected from economic needs. "What we are looking for from planners is 'here is what you need to change to make it happen' rather than 'sorry no, go away,'" said Mr Hogg.
On carbon reduction targets, Mr Hogg says the Scottish Government is listening to Homes for Scotland's message that new homes cannot take the full burden of new building standards without pushing up costs. "New homes are already incredibly energy-efficient and account for less than 0.5% of the housing stock each year. You are making 0.5% super energy efficient but the other 99.5% is where the big carbon contribution is." He says Finance Secretary John Swinney has begun to talk about "retrofit" as a key element of the policy.
The unassuming new leader of an industry at the core of Scotland's recovery prospects admits he has been on "a rapid learning curve to get up to speed".
But he says: "It is a whole new world out there, and I think we are up for the challenge."
Trained as structural engineer
Redland Roof Tiles, specification manager
Pilkington Insulation, sales & marketing manager
MBA in consumer psychology, Lancaster University
Harrison Drape, sales & marketing director
Miller Homes, UK marketing director
Sorouh PJSC, Abu Dhabi developer, senior marketing
Homes for Scotland, chief executive
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