Investment and labour costs are main concern for social housing sector post-Brexit

Private sector investment and labour costs remain the major concerns for Scotland’s social housing sector post-Brexit, new research from SFHA has found.

In a follow-up to the Scottish Federation of Housing Association’s 2016 research on the sector’s  views on the vote to depart the European Union and the subsequent uncertainty on what leaving would actually mean for the sector, SFHA again asked its members about areas of concern and perceived opportunities.

One of the major concerns is increased costs if the UK were to leave the customs union, a concern that was not highlighted in the 2016 survey. The value of the pound reducing would put pressure on costs, which would – in turn – affect service levels to 280,000 households and have an impact on the salaries of the 15,000 people working in the sector.

Respondents also raised concerns about long-term economic uncertainty having a detrimental impact on growth, inflation, interest rates, business confidence and lenders’ attitude to risk.

In the survey, it was revealed that a major organisation currently in the process of raising finance to build more much-needed social homes had been told by lenders that the uncertainty made them nervous and that lending rates were likely to be negatively affected. This was a significant change from 2016, when the majority of respondents said there had been no negative feedback from potential private finance providers or investors since the referendum.

A further concern was about EU funding, which many have used for employability training, and how the funding would be replaced post-Brexit. In addition, the current difficulties in sourcing skilled workers for repairs and development in some areas of Scotland could be considerably worsened by Brexit.

Respondents to SFHA’s 2016 survey were slightly more positive about Brexit, with some members identifying opportunities for Scottish and British construction trades.  This latest survey, however, revels that this optimism has all but disappeared, with gone with 100% of respondents admitting concerns about restricted labour increasing costs.

Ahead of the vote on the proposed deal in the House of Commons today, Sally Thomas, Chief Executive of SFHA, said:

"Ahead of today's vote in the Commons, housing associations are keen to remind elected members, that no matter what the outcome, ensuring access to finance, materials and staff - at costs which allow them to continue to develop - are vital.

"There remains a huge outstanding need for good quality, social housing in Scotland and while housing providers are doing all they can as part of the current programme, ensuring investor interest in the long-term is vital if the people of Scotland are to get the homes they need and deserve in the long term.”