Loreburn Housing Association have announced plans to pause ambitious plans to develop new homes in light of economic challenges faced by the sector to allow them to prioritise investment in existing homes.
Loreburn HA, a social landlord with over 2,500 homes in Dumfries & Galloway says it must balance the need for new affordable and energy efficient homes with meeting the priorities of its existing tenants and the challenges they face trying to meet rising energy costs in less energy efficient homes.
Kirsteen McGinn, Chief Executive at Loreburn commented: “We need to balance our ambitions to build new homes with improving the energy efficiency of our existing homes and with rising interest rates and inflationary increases across all areas of our activities, we cannot deliver both”.
“We don’t want to create a two-tier system where some of our tenants are in highly energy efficient homes that are cheaper to run and have others in homes that are cold and hard to heat”.
Registered Social Landlords (RSLs) across Scotland are likely to have to make some difficult spend decisions, with the Scottish Housing Regulator reporting that projections for the next 5 years nearly 15% lower than last year’s projections meaning around 4,500 fewer affordable homes will be built.
The Regulator’s National Report on the Scottish Social Housing Charter further outlines that RSLs are also predicted to cut back or delay investment in existing homes as they face significant cost increases in maintenance and investment. New costs for ‘retrofit’ programmes for investment works to meet increased standards of energy efficiency is another priority for many RSLs with older housing stock.
The impact of below-inflation rent increases applied by most social housing providers as they attempt to keep rents low, compounded by the wider economic challenges, is likely to be felt across the sector for some time to come.
Mrs McGinn continued “We are dedicated to delivering transformative projects and have identified those new build developments that are a priority to deliver when there is a viable business case. For now, we want to make a clear commitment to our current tenants that investing in their homes remains at the forefront of our priorities”.
The Association confirmed they remained optimistic about the future of projects identified for development and the positive impacts they would have on local communities once completed. Mrs McGinn added “We value the trust and support placed in us by our stakeholders and assure them that we are dedicated to finding resolutions to the challenges we face”.
More information about the decision can be found on Loreburn’s website.