By RYAN TAYLOR
THE CREDIT crunch is adding new pressure to the council’s housing waiting list, as people succumb to financial pressures brought about by the downturn, it was revealed this week.
Head of housing Chris Medley said an increasing number of people were defaulting on their mortgages and joining the lengthy queue for council houses.
The news puts added strain on the authority, which is already bracing itself for an influx of new tenants when new homeless legislation is introduced.
Earlier this year the Scottish government called for all homeless applicants to be entitled to a roof over their heads by 2012 – a move that effectively abolishes priority needs testing.
Mr Medley said it was too soon to tell exactly how many new housing applicants would appear, but added there was clear evidence Shetland was not insulated from the oncoming recession.
“We ask people to fill in forms and answer questionnaires when they are joining the waiting list and there is an increasing number of people who are unfortunately defaulting on their mortgages.
“There is also evidence of people saying they can’t afford the rent in the private sector, and that is certainly evidence that we have got problems. Our waiting list is growing each year, and our numbers of homeless applicants is growing as well. We know there are more and more people having houses repossessed. It’s certainly not a bright picture, and it’s made really difficult for staff when they have to say, ‘sorry, we just can ’t help’. In reality, the houses just aren’t going to be there in the numbers that we want them to be.”
Mr Medley said government moves to streamline its funding for housing associations would only serve to exacerbate the problem.
A Holyrood consultation paper, Firm Foundations, has been designed to provide a greater level of housing output at a reduced cost to the government.
Deputy First Minister Nicola Sturgeon has said housing associations needed to be more efficient at delivering new stock. She said the subsidy paid by government was rising by eight per cent more than inflation each year, a trend she described as “not sustainable”.
The upshot is that Hjaltland Housing Association is being forced to delve deeper into its reserves to pay for major housing projects.
Hjaltland chief executive Robin Sandison said the government’s quest for greater efficiencies was “laudable”, but added the association may not be able to build all the houses it wanted to.
That will add to the SIC’s woes, as many of Hjaltland’s houses are built for the council.
“Anything that affects Hjaltland’s ability to build new houses is going to have a detrimental impact on our waiting lists,” said Mr Medley.
“If we can’t house people – and Hjaltland can’t house people – then I would say the council is equally concerned. In fact we are probably more concerned because we have got a statutory responsibility to house homeless people, and we rely on Hjaltland to help us do that.”
Council convener Sandy Cluness said the authority would help Hjaltland in whatever way it could.
“We appreciate what Hjaltland has done already, and if we can help them make up any difference we will do that.”
Hjaltland is now focusing its efforts on areas within Shetland where a greater housing demand exists, such as Lerwick.
On Tuesday Hjaltland announced plans were underway to build 34 new houses at the Quoys development in Sound.
Property services manager Bryan Leask said the new houses, which represent the third and final stage of the scheme, would help address the lengthy waiting list.
“It will make a difference. There are 34 new houses going in it. That will help impact on the 400 plus applicants we have in Lerwick.”
He said it was important for Quoys to “get away from being a building site”, and for it to become “a community where people can enjoy living”.
Shetland Islands Council has agreed to fund the building work by providing an interest free bridging loan.
The agreement follows a cut in funding announced by the government earlier this year.
In May The Shetland Times reported Hjaltland had bid for a £9 million government grant for building new houses.
It subsequently learned it would only receive £2.64 million in 2008/09 – just 44 per cent of last year’s £6 million grant.
“We’re in the process of finalising an agreement with the SIC for them to bring projects up to speed again,” said Mr Sandison.
“The SIC is going to give temporary funding, and all else being equal we’ll be able to get back some degree of normality.”
Mr Medley confirmed the council was working with the association “to help ensure they can finish what they have started”.
Hjaltland have also reacted to criticisms levied against it at last week’s planning board meeting, when objectors to 12 new houses in Sandwick accused the association of riding roughshod over communities where they are looking to develop.
Mr Sandison said many people had automatically assumed Hjaltland were involved in the new development, despite last week’s Shetland Times report stating they are not.
“We have 20 new houses being developed in Sandwick at this time and with a current waiting list of approximately 25, we feel that this is sufficient to meet the current needs of the community.
“As such we would be reluctant to develop any more houses in Sandwick at this time.”