Development staff could face redundancy after the landlord warned that rising costs mean that new projects are not financially viable.

Harbour Homes currently has 108 employees, including six in the development team. It manages 3,092 properties (2,542 social rent homes, 423 mid-market rent homes and 127 shared ownership properties).

In an email to staff, group chief executive Heather Kiteley said: “Harbour Homes costs have continued to rise, although at a slower rate than in 2022/23, and this has been reflected in tender prices for new housing development.

“Rising costs, high interest rates, procurement issues and restrictions on our ability to increase rental income in line with inflation have made it impossible for future developments to demonstrate financial viability when assessing them. The price of private finance has also risen significantly since we last approached the market.

“As a result of the ongoing impact of these challenges, we have taken the difficult decision to cease our development programme. This decision will unfortunately have an impact on the future of our development team.”

A spokesperson confirmed to Scottish Housing News that Harbour Homes is currently consulting with team members and working to find suitable alternative roles, where possible, elsewhere in the organisation.

“Unfortunately, rising costs and high rates of interest and inflation mean that it is impossible to make building new developments financially viable,” the spokesperson said. “It is essential that we keep our tenants’ rents as affordable as possible and continue to deliver our vital services.

“This means we have had to make the difficult decision to pause our development programme. As we do not know when external conditions will enable us to start again, we’ve been left with no choice but to advise colleagues in our development team that they are at risk of redundancy. We’re currently following a formal consultation with those involved which is exploring all possible alternatives to redundancy.”

Harbour Homes has also approached tenants about introducing shorter working hours as part of a cost-cutting drive to limit rent rises.

The spokesperson added: “We are considering potential ways to control costs and keep rents as affordable as possible. One option which we’re considering looking into is a four-day working week.

“We advised colleagues about this possibility prior to mentioning it, as an example of a possible option, to tenants in our annual rent consultation. Should we decide that there is merit in investigating this option further, a full consultation process will take place.”