Housing associations are facing “formidable” financial challenges, the Scottish housing regulator has warned.
The prospect of rises in interest rates and the need to invest in properties to bring them up to the national housing quality standard will impact on the sector.
The regulator has published an analysis of the finances of housing associations, which manage more than 270,000 homes across the country, including 24,500 in Tayside and Fife.
Turnover last year rose by 7.6% to just over £1.2 billion, but 24 associations more than one-tenth of the total still made a net deficit.
The regulator said the environment was “challenging and likely to remain so for the foreseeable future,” so a focus on cost control and operational efficiency would be essential.
Associations added 3500 properties to their stock last year. Much of their funding for new-builds came from the taxpayer, but they also borrowed significant sums from private lenders.
That means many will be “vulnerable to the effects of a rise in interest rates from their current historic low,” the regulator’s report said.
Associations have estimated they will need to spend £500 on average to bring their stock up to the housing quality standard, ensuring they are safe, secure, free from serious disrepair and have good quality facilities.
They will also have to make substantial investments to cut energy use as part of the Scottish Government’s commitment to reduce greenhouse gas emissions.
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