Grant reduction may hit house building
Housing associations in Scotland will struggle to build homes after the government dropped grant rates by £2,000 a unit, an umbrella group has warned.
The Scottish Government issued guidance last week stating it was dropping the housing association grant per unit from £68,500 to £66,500 for 2010/11.
Andrew Field, acting chief executive of the Scottish Federation of Housing Associations, said this would leave associations struggling to build enough affordable homes.
He said the move would create extra ‘red tape’ for developers.
‘Now is not the time to tinker with average grant – as this change will just mean extra paperwork for many affordable housing providers and create delays for the constructive development partnership arrangements that are evolving around the country,’ he said.
‘We appreciate that we are in an unprecedented and prolonged period of public spending constraints. We are in active discussions with the Scottish Government about ways to meet the huge range of housing challenges facing us within the context of severe financial constraints.’
Mr Field noted house building dropped by 20 per cent last year although housing associations and co-operatives increased build levels by 30 per cent.
The Scottish Government has increased the grant for rural homes from £68,500 to £70,000.
Marion Notman, chair of the Rural & Islands Housing Association Forum and chair of Cairn Housing Association, said: ‘RIHAF welcomes the slight increase in the level of subsidy assigned by the government to the building of a rural house.
‘More importantly, a principle has been established that affordable house builders in rural areas do face unique challenges in terms of the cost of building and we are very pleased that this has been recognised by the Scottish Government, following representations from RIHAF and the SFHA on this point.
‘However, we note that many rural projects, especially in remote areas will cost over £70,000 per unit, and these will still face delays.’
This change in grant rate for housing associations comes four months after the Scottish Government announced it is considering increasing the amount of grant given to councils from £25,000 per unit to £30,000.
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