Page last updated at 10:43 GMT, Tuesday, 10 March 2009

'Record' cash for low-cost homes

Builder at work
Some housing associations have revised their construction targets down

A total of 644m is being ploughed into affordable housing over the next year, the Scottish Government has announced.

The investment will bring in at least 6,500 new and improved low-cost properties, said the new housing minister, Alex Neill.

The Chartered Institute of Housing said the economic crisis compounded problems for housing associations as vital private finance dries up.

The charity urged ministers to give associations extra money.

Mr Neil said the Scottish Government was investing "record amounts" in affordable housing, amounting to more than 1.5bn over three years.

Pipe dream

"These are hard times for businesses and families across Scotland and this government is working hard to meet this challenge, refocus activity and ensure Scotland gets through the economic downturn in the strongest possible position," he said.

The announcement came as a study of 38 housing associations by the Chartered Institute of Housing suggested more than a third could no longer afford to build or were unsure if they could.

Scottish Deputy First Minister Nicola Sturgeon has written to Chancellor Alistair Darling, urging him to inject 500m into the Scottish construction industry.

Chartered Institute of Housing chairwoman Cy Neil backed the call, but said Scottish ministers should put in additional money of their own and restore subsidy levels to those of 2007-08.

She said: "We are concerned that without a fiscal stimulus of their own - through restoring subsidies to the pre-credit crunch level - then any calls for a cash injection from Westminster may prove to be nothing more than a pipe dream.

"There is no guarantee that housing associations will be able to spend such an injection, as borrowing from banks and building societies has become much more difficult to attract and more expensive in this time of the credit crunch and economic downturn."

The call was backed by the Scottish Federation of Housing Associations, as well as homelessness charity Shelter Scotland, whose director Graeme Brown, said: "This still leaves the housing cash pot short next year and, with a housing crisis and a homelessness target to meet in 2012, the Scottish Government has no choice but to plough more money into housing."

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