Council to Lobby for More Affordable Housing

31st May 2009

The Highland Council is to step up its lobbying of both the Scottish and UK Governments for increased investment in new affordable housing.

The impact of the recession and financial constraints affecting housing associations have significantly reduced the Council's ability to meet the growing demand for affordable homes.

Councillor Margaret Davidson, Chairman of the Housing and Social Work Committee, believes the Governments should give greater priority to housing by allocating more funds to local councils experiencing acute housing needs, such as Highland.

Over the past four years, an average of 535 new homes per year have been built in Highland. The Council's Landbank Fund has played a major role in enabling house building by purchasing and servicing plots and forward funding development by housing associations.

This year the total is expected to be 470 but the outlook for future financial years is not so bright.

Funding has fallen from £40 million to an anticipated £26 million in 2010/11 and no indication has been given for 2011/12 onwards. Given the likely level of already committed projects, there will be very little funding available in 2010/11 for new projects.

Councillor Davidson said: "It is nothing short of a miracle that we will be able to provide 470 affordable homes this year in the Highlands. But as the year unfolds, we are going to have to put a brake on building. We know how tight money is and we know it will get tighter. Our plea to the Scottish Government is that they must give a higher priority to housing and invest in areas, such as Highland, that are experiencing sustained and very real housing pressures."

Councillor Davidson also noted that the Scottish Government has reduced the levels of grant funding to housing associations, which is impacting on their building programmes as they find it increasingly difficult to borrow funds at realistic terms.

Local housing associations have also reported that several large banks and building societies were unwilling to grant mortgages for shared equity properties.

New build private development by speculative developers has reduced dramatically as developers awaited an upturn in market conditions.

The Committee also agreed the Council should continue to prioritise the use of Council Tax revenue from second and holiday homes for part funding of high cost rural projects in areas of housing need.

Councillor Davidson told the Housing and Social Work Committee that council had met with building firms and mortgage lenders recently to discuss how best to combat the impact of the recession on the house building industry.

A report would come back to the committee in August highlighting potential solutions for helping the industry.