Shortage of ‘affordable’ homes

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The latest housing statistics for Scotland released this week, show a fall in the number of affordable homes built last year, which will only fall further without action to prioritise new affordable housing, the Scottish Federation of Housing Associations (SFHA) said.

The total number of housing association completions in the financial year 2011-12 decreased by 7 per cent compared to total completions in the financial year 2010-11 (from 5,111 to 4,776).

In total there were 6,882 completions in the financial year 2011-12, including council completions, under the Affordable Housing Supply Programme - a 5 per cent reduction on the previous year. (1)

Maureen Watson, Director of Policy at the Scottish Federation of Housing Associations said:“These figures bear out the SFHA’s contention that the number of new genuinely affordable homes will fall. Completions by associations and co-operatives are already down 7% on last year.

“The fact remains that, the current level of government grant per unit is not going to enable our members to continue to build at current rates into the future, particularly in rural areas where costs are higher. We recognise the government recently tweaked the benchmarks for rural and green schemes, but the delivery of genuinely affordable new homes remains highly challenging.

“Associations are finding it much harder to access bank lending at reasonable rates, and their balance sheets are being hit by the impact of the welfare reforms and the need to provide more support to tenants,” continued Ms Watson. “Continuing to build at low grant levels is not financially viable – several of our members have already stopped developing, and more may follow suit.

“While we don’t doubt the Scottish Government’s commitment to providing more affordable housing, we do want them to understand the huge pressures on housing associations and co-operatives, who have continued to deliver as many homes as they possibly can with less public subsidy.

“There is a serious shortage of quality affordable housing across Scotland, with approximately 335,000 households on waiting lists (2). We understand there is a real constraint on capital funding at present and we back the Government’s call to the UK Chancellor to unlock more funds. Investing in housing will meet social need and provide an undoubted economic boost.”