SHR chief executive Michael Cameron

The fourth meeting of the urban landlord group was held on 1 May.

Sharing the main points covered, chief executive Michael Cameron said the meeting’s discussion was wide-ranging.

“The group firstly reflected on significant developments since it last met in November,” he said. “These included the Scottish Government’s budget announcement of a significant reduction in funding for new homes, worsening statistics on homelessness, and the recent developments in national politics and what those might mean for social housing.”

Mr Cameron added: “Group members spoke of the impact of increased uncertainty resulting from recent political developments, but also highlighted what they described as a growing sense of ‘policy drift’ and a slowing of decision-making at national and local level. Group members noted the challenge this presents to social landlords’ budgeting and planning, in the short and longer terms. The group raised the possible benefits of re-establishing a national housing agency to help deliver longer-term planning and greater certainty for social landlords.

“There was a consensus within the group on the importance of tackling homelessness, and in particular reducing the number of people in temporary accommodation. Members of the group expressed their willingness to do all that they could, but also highlighted the challenge in increasing the number of homes they let to people who are homeless and the reality that this means others in housing need have to wait longer to have their need addressed. Some warned against a policy position that risks making a homelessness application the only route to a home and stressed the importance of prevention work.

“Group members highlighted the importance of government listening to housing providers when deciding policy responses to homelessness. The group members recognised that supply of new homes was critical to address the homelessness challenge, but also that a major increase in the number of new homes would take time to deliver and would need significantly higher levels of public subsidy.

“The conversation moved on to the proposed Social Housing Net Zero Standard. Most of the group members thought that the proposed standard was preferable to the current Energy Efficiency Standard for Social Housing, but that there will be significant challenges for social landlords in delivering it. The first challenge the group identified is funding; members were clear that major investment in existing homes will be needed, and that the impact on rent levels could be unsustainable if there is not substantial levels of government subsidy to support this work.

“Group members also raised a concern that, given current technologies and the price of electricity, the installation of clean heating systems can increase the cost of heating for tenants and can work against the important objective of reducing fuel poverty. Members also highlighted the challenges around investment in mixed tenure blocks, the need to develop an adequate supply chain for net zero work, and that innovation was more challenging in the current difficult economic context.

“The group members recognised that homelessness and climate change are ‘wicked problems’, and some felt that there is an opportunity, amidst the current uncertainty and difficult context, to reset the general policy framework for social housing. Members spoke about changes to enable landlords to maximise the use of existing houses to meet need and a more realistic route map to net zero for social housing.”

The Regulator held the fourth meeting of its rural & islands landlord group on 14 May, with many of the same issues raised.

Andrew Watson, a Scottish Housing Regulator board member, said: “The group members firstly spoke of the uncertainty they are having to operate with, particularly around net zero. Members felt that the delays in finalising the proposed Social Housing Net Zero Standard and the lack of clarity on government funding was having a significant impact on their ability to plan across the full range of their activities.

“Members also touched on the wider implications of funding net zero, with one member speaking of a possible eighty percent reduction in the number of new homes they could afford to build if they had to fully fund the likely costs of retrofitting existing homes to the new standard. Members also spoke about delays in confirmation of net zero grants putting at risk programmes for investment in the current year and beyond.

“Members went on to highlight a more general and emerging problem of what one member described as ‘policy drift’, where national policy is delayed or the expectations on landlords remain unclear. Members felt that this increased the likelihood that social landlords would become more cautious, or even risk averse, when developing future plans. Members also spoke about having to deal with policy conflicts, including those around building new homes while keeping rents affordable and addressing net zero while tackling fuel poverty. All of the members highlighted the challenge that short-term planning at the national level presents to their longer term budgeting and planning.

“The group’s members emphasised the importance of national policymakers being close to social landlords and the crucial importance of local context and considerations, especially in rural areas and islands, remaining to the fore in decision making.

“Members were confident that traditional lenders still view social landlords as good places to invest, and that it remains relatively straightforward to get borrowing for the right projects. However, they highlighted that social landlords, particularly those operating in rural areas and islands, are becoming less attractive as development partners to smaller, local building and maintenance contractors because of more complicated procurement processes and the higher building standards required in social housing. Supply chain weakness was noted as a general issue, with a very limited, or no, contractors available to meet local needs,

“Group members highlighted growing difficulties in meeting the need for homes for local workers, including key workers. Members emphasised the importance of having flexibility in allocation policies, balancing priorities on homelessness, key workers and other housing needs. The group would welcome further guidance on the use of local lettings initiatives. The members welcomed work which community groups did on housing and observed that social landlords could supplement this effort with expertise and support.

“The conversation moved on to the cost of living crisis, with members telling of the continuing difficult impact of this on tenants and local communities. One member noted that the demand for financial inclusion services had never been higher. The cost of food was highlighted as a particular issue in rural and Island communities.

“The groups agreed that there would be value in focusing the discussion at its next meeting on what the future agenda may be for social housing and what things social landlords may need to consider into the longer term.”