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House-building 'being hindered' 'Record' cash for low-cost homes
(about 17 hours later)
Efforts to build homes are being hindered by a reduction in government subsidies, a housing charity has said. A total of £644m is being ploughed into affordable housing over the next year, the Scottish Government has announced.
The Chartered Institute of Housing warned the economic crisis compounded problems for housing associations as vital private finance dries up. The investment will bring in at least 6,500 new and improved low-cost properties, said the new housing minister, Alex Neill.
A study by the charity of 38 housing associations in Scotland found more than a third can no longer afford to build or were unsure if they can. The Chartered Institute of Housing said the economic crisis compounded problems for housing associations as vital private finance dries up.
The housing minister is due to address CIH Scotland's conference in Aberdeen. The charity urged ministers to give associations extra money.
The minister, Alex Neil, has faced demands to build 10,000 affordable rented homes to ensure homelessness targets are met by 2012. Mr Neil said the Scottish Government was investing "record amounts" in affordable housing, amounting to more than £1.5bn over three years.
CIH Scotland has now also urged ministers to give housing associations extra money by restoring subsidy levels to those of 2007/08. Any calls for a cash injection from Westminster may prove to be nothing more than a pipe dream Cy NeilCIH Scotland Pipe dream
The charity's study, Arrested Development, will be launched at its annual conference. "These are hard times for businesses and families across Scotland and this government is working hard to meet this challenge, refocus activity and ensure Scotland gets through the economic downturn in the strongest possible position," he said.
It found that nearly half of the housing associations who could still build said they were revising their targets down - with some constructing up to 60% fewer homes. The announcement came as a study of 38 housing associations by the Chartered Institute of Housing suggested more than a third could no longer afford to build or were unsure if they could.
CIH Scotland's chair Cy Neil backed Scottish Government calls to Westminster to provide money to build houses that are cheaper to buy. Scottish Deputy First Minister Nicola Sturgeon has written to Chancellor Alistair Darling, urging him to inject £500m into the Scottish construction industry.
At the start of March, Deputy First Minister Nicola Sturgeon wrote to Chancellor Alistair Darling, urging him to inject £500m into the Scottish construction industry. Chartered Institute of Housing chairwoman Cy Neil backed the call, but said Scottish ministers should put in additional money of their own and restore subsidy levels to those of 2007-08.
But Ms Neil also called on Scottish ministers to put in additional money of their own.
'Fiscal stimulus'
She said: "We are concerned that without a fiscal stimulus of their own - through restoring subsidies to the pre-credit crunch level - then any calls for a cash injection from Westminster may prove to be nothing more than a pipe dream.She said: "We are concerned that without a fiscal stimulus of their own - through restoring subsidies to the pre-credit crunch level - then any calls for a cash injection from Westminster may prove to be nothing more than a pipe dream.
"There is no guarantee that housing associations will be able to spend such an injection, as borrowing from banks and building societies has become much more difficult to attract and more expensive in this time of the credit crunch and economic downturn. "There is no guarantee that housing associations will be able to spend such an injection, as borrowing from banks and building societies has become much more difficult to attract and more expensive in this time of the credit crunch and economic downturn."
"Yet the Scottish Government is asking them to seek more funding from this source to the tune of between £4,000 to £5,000 for every house built."
She added: "Surely now is the time that the Scottish Government should be doing all it can to help registered social landlords and their partner local authorities to build more affordable housing to rent.
"It can best do this by returning the subsidy level to that of 2007/08."