Stuart Beattie: Housing associations face paralysis from squeeze and freeze

Stuart Beattie: Housing associations face paralysis from squeeze and freeze

Stuart Beattie

Stuart Beattie discusses the difficulties faced by Registered Social Landlords (RSLs) in Scotland, including the recent rent freeze imposed by the Scottish government and new energy efficiency standards requirements.

Households are not the only group feeling the chill of winter. Registered Social Landlords, which include housing associations and other social housing groups that provide homes for thousands of families across Scotland, also find themselves out in the cold as a result of Scottish Government policy targets and cost-of-living crisis initiatives.

In September RSLs were hit with new Scottish Government legislation freezing both public and private rents in its response to high inflation and its impact on many tenants. While there was welcome news before Christmas that these measures will end in April for social housing landlords, the six-month freeze caused significant uncertainty and will continue to cause hardship for a sector already carrying huge financial burdens on its shoulders.

While well-intended in its aim of protecting lower income families, the rent freeze further inhibits RSLs’ ability to invest in new, affordable homes which are so badly needed across Scotland. Recognising this shortfall, the Scottish Government set a target for 110,000 new affordable homes to be built by 2032, a pledge that can only be met through investment from housing associations and other RSLs.

It is abundantly clear that this investment in new home building can only be made if RSLs have the funds to do this. It was therefore little wonder the Scottish Federation of Housing Associations (SFHA) warned of the unintended consequences of this legislation prior to it being rolled out.

The rent freeze came after the Scottish Government introduced energy efficiency standards requiring all rented social housing to achieve a minimum of a ‘B’ rating by 2032. While this is also well-intended legislation aimed at protecting the environment, it does mean RSLs must invest huge sums - at least £2bn according to the SFHA - to achieve this target.

These factors combined with other current economic issues including the inflation-driven rise in employee costs are now proving crippling to many RSLs. What was already a major challenge for the sector is now looking virtually impossible in light of recent circumstances. The current squeeze on these organisations has left many unable to invest to help address the housing shortages or improve their housing stock to make it more energy efficient.

The Scottish Government needs to alleviate this paralysis if it expects RSLs to play a full role in providing affordable and comfortable housing for the least well-off and most vulnerable in Scotland. While part of the solution will inevitably lie in providing more funding, there are other areas which it can help the sector including greater flexibility in planning processes and more incentives in brownfield site development to support the required increase in new builds. Developing apprenticeship programmes to ensure we have the workforce so energy efficiency measures can be quickly rolled out is another key area for investment which can also help grow the green economy.

This support will be vital for RSLs to allow them to make the huge investment that is essential in providing homes for those who are among the poorest in our society and achieving Scotland’s green ambitions.

Stuart Beattie is head of social housing at accountants Chiene + Tait. This article first appeared in The Herald.

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