Scottish Cities Alliance

03.08.23 By James Riding for Inside Housing

Housing associations and councils have welcomed the Scottish government’s £60m acquisition plan to increase the supply of social and affordable housing.

The scheme, announced last month, will support councils and social landlords to purchase empty and private sector homes to convert into social housing.

Tom Barclay, chief executive of Kingdom Housing Association, told Inside Housing that the plan “must be welcomed, especially in helping alleviate the impact on people and particularly children” staying in temporary accommodation.

Carolyn Lochhead, director of external affairs at the Scottish Federation of Housing Associations, said the Scottish government has indicated for a while that it “was quite minded to support” such a scheme.

The money will be taken from underspend from the government’s 2023-24 Affordable Housing Supply Programme.

“We would have preferred it was new money,” said Ms Lochhead. “There needs to be a big focus to meet housebuilding targets [and] we’re not on track.”

Mr Barclay said he had made the point directly to housing minister Paul McLennan that “this is not a demand-side issue, instead it’s all about boosting a drastic under-supply of new affordable housing”.

He continued: “So, let’s welcome this £60m announcement, with a focus on bringing existing housing stock back into the affordable housing supply side, but let’s also be realistic about the sheer scale of the challenge ahead.

“We need to stretch our thinking beyond the existing budget for affordable homes supply in Scotland, and look to agree a new fiscal deal for housing that’s commensurate with the mountain we have to climb.”

A spokesperson from City of Edinburgh Council told Inside Housing that the announcement would support its regeneration ambitions. The council is already buying homes for permanent let and temporary accommodation. It focuses on block consolidation, buying homes where the council already has a minimum of 50% ownership.

“Majority ownership makes repairs and maintenance easier,” they said. “We dispose of homes in blocks where we have minority ownership and use the capital receipts to help fund acquisitions. The net effect is to purchase significantly more homes than we dispose.”

The Scottish government hopes that buying existing homes will speed up housing provision compared to building new homes. It “could be quicker to buy” rather than build, Ms Lochhead said, but there might be “a reasonable time to get it up to standard”.

Edinburgh Council said the scheme would speed up housing provision, “but it is dependent upon homes becoming available in the right place, of the right quality and at the right price for affordable developers to purchase”.

It is likely there will be a time limit to spend the money. Grant funding is never usually carried forward, the council said, so it is likely that all monies will need to be spent by 31 March 2024.

It is also unlikely that grant funding would be able to cover the total cost of a house purchase, the council said. Edinburgh currently uses grant funding for up to 50% of the purchase price on its acquisitions.