New affordable houses peak at 170, but council told of future funding pressures

A RECORD number of affordable houses was completed in the Borders last year.

Councillors have been told it was the first time the local target of 100 units per annum had been exceeded.

A report to the last meeting of Scottish Borders Council’s executive by Cathie Fancy, group manager for housing strategy and service, revealed that when the council prepared its five-year strategic housing investment plan (SHIP) in 2009 it was agreed by Scottish infrastructure minister Alex Neil that the Borders should work to a two-year programme.

“This was because of the impact of several large projects and those assisted by accelerated funding which skewed programme delivery,” said Mrs Fancy.

“By the end of March, 2010, 38 properties had been delivered, all of which were for rent,” she revealed. “However, by the end of March, 2011, 170 properties had been completed – 153 for rent and 17 for shared equity.”

This was, she said, “excellent progress”.

She added: “We are really pleased with the success of the accelerated programme, which is largely the result of good partnership working between SBC, our registered social landlord (RSL) partners, good relationships with the private sector and the fronting ability of the Eildon Housing Association, which was responsible for the vast majority of completions.

“We have had really good support from councillors and have been able to use the money raised from the removal of Council Tax discount on second homes to assist a number of projects.

“Other developments in the pipeline include Dovecot and Cleland Avenue in Peebles, Newcastleton and Stichill and we are awaiting confirming of funding allocations in relation to a bid for Lauder, so it is not a bad programme given current circumstances.”

Mrs Fancy also highlighted that SBC had, last Thursday, become the first local authority in Scotland to sign a National Housing Trust (NHT) agreement. Under the new scheme, SBC will, through borrowing, meet 65 per cent of construction costs for 51 houses in Galashiels and Innerleithen, in a partnership with private developer Tweed Homes of Peebles.

These rented homes, affordable for households on salaries of between £15,000 and £20,000, will have fixed tenancies of between five and 10 years and the council will be fully recompensed when the properties are sold, with sitting tenants given first refusal on purchase.

Andy Pearson of Tweed Homes has invited Mr Neil to perform the sod-cutting ceremony when work gets under way at the Balnakiel site in Galashiels. But SBC’s executive was warned, however, that public funding to provide affordable housing was already being squeezed.

Mrs Fancy said the Scottish Government had effectively suspended normal housing investment plan policies and introduced a new £50million “innovation and investment fund” for the current financial year only. This allocated £20million to assist council house building (not applicable in the Borders), £20million for RSLs and £10million for innovation projects.

She said: “It reduces housing association grant to £40,000 for three-person RSL houses which is only paid on completion, rather than in staged payments ... and only a limited number of RSLs with sufficient financial capacity will be able to develop affordable housing under these arrangements.”

She also reported that future funding cuts were anticipated in the resources available to RSLs for major house adaptations or how the £8million allocated for this year would be allocated to individual councils. This represented a 13 per cent cut on last year which, itself, was down 45 per cent on 2009/10.

“This raises serious questions about the SNP’s commitment to affordable housing,” said Tory councillor Sandy Scott of Jedburgh.

After the meeting, Mrs Fancy told us: “There are undoubtedly a number of financial challenges including a smaller grant, more restrictive terms, such as no payment until completition, and higher requirements regarding sustainability and design standards.

“This leads to uncertaintly among lead organisations like Eildon and could see lenders pricing for risk. In addition, lower grants will result in pressure to put rents up and clearly we now have to balance investment in existing stock against using resources to build new houses.”