A new study from the Chartered Institute of Housing Scotland (CIH) has found that housing associations across Scotland are finding it more difficult to build new homes after the Scottish Government cut subsidy levels and private finance has become increasingly scarce.

The study calls for the Scottish Government to give housing associations a fiscal stimulus by restoring subsidy levels to those operating pre the credit crunch in 2007/08.

The main findings of the study, which surveyed housing associations who have been building new homes for affordable rent are:

• Nearly half of the housing associations that said they could still mange to build have had to reduce their targets downwards - with nearly 30% of these reducing build targets by 40-60%
• Over 35% of housing associations either could no longer afford to build are were unsure if they could do so
• Nearly 60% of housing associations are finding it more difficult to access private finance for new housing developments – but Scottish Government funding changes require housing associations to attract more private funding in order to be able to build
• Scottish Government figures show that housing associations new build housing starts in quarter 3 of 2008 were down by on average more than 40% compared to Q3 in 2005-07.

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The CIH Scotland Chair said they support the Scottish Government in their call but are concerned that without a fiscal stimulus of their own, through the restoring of subsidy levels 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".

The CIH said it recognises the need to drive efficiencies and get the best value for the public pound wherever possible in the sector but in this time of growing housing need and home repossessions has urged the Scottish Government to fully prioritise new house building and achieve their ambition to see more affordable homes built than under the previous administration.

(GK/JM)