Media Release: New funding models – no substitute for subsidy for affordable housing?

NEW research for the SFHA (Scottish Federation of Housing Associations) is being launched today (November 14).

It explores long-term funding options available to housing associations and co-operatives to help build new homes in Scotland. The report underlines the importance of subsidy in developing affordable housing.

The report outlines a variety of models of longer-term funding available to housing associations and co-operatives. The models reviewed fall into two broad types: debt finance and lease finance.

Housing associations and co-operatives are facing challenging times, regarding levels of subsidy and a tougher lending environment.

The research by finance and risk management experts, Murja Ltd, concludes that none of the models are capable of delivering what the sector recognises as genuinely affordable social housing.

While each option has its advantages and disadvantages, few cater for housing associations seeking amounts of less than £5 million. The report identifies that developing without subsidy is unlikely to work in many areas because the rents that would need to be charged to cover costs would be so high as to be unaffordable.

Finally, Murja emphasises that housing associations and co-operatives need to understand and appraise the risks of any new financial model, some of which are untested in practice.

Maureen Watson, SFHA policy director, said:

“Housing associations and co-operatives are facing many challenges in the current economic climate. The UK Government’s Welfare Reform Act 2012 brings massive changes to the welfare system which supports rent payment for many tenants. These changes will have far-reaching financial and operational implications for our sector. Capital subsidy for new affordable housing is needed now more than ever. It’s not the housing providers that need the subsidy; it’s the people who need the houses.”

The report by Murja Ltd entitled, ‘Long-term Funding Options’, was commissioned by the Scottish Federation of Housing Associations (SFHA) and is being launched at SFHA’s 2012 Finance Conference.

The conferencem called Risk and Reward?, looks at the key financial issues which are currently affecting the sector including welfare reform, the borrowing environment, tax and VAT issues and pensions.

As well as hearing from financial experts in the UK, delegates will hear from Dutch housing consultant, Rudy De Jong, on the recent financial issues facing one of the largest associations in the Netherlands.


The report is available for free to all SFHA members. A copy is available upon request to journalists.

For further information, contact Kirsten Walker on t: 0141 567 6221 m: 0788 788 8348 or e:

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  1. The report, Long-term Funding Options is available for free to all SFHA members. A copy is available upon request to journalists. The report by Murja Ltd was commissioned by the SFHA.
  2. The SFHA was established in 1976 and has around 170 members providing affordable housing and wider community services in Scotland, as well as a further 200 commercial members. The SFHA is owned by its membership and exists to support the work of housing associations and co-operatives in Scotland by providing services, advice and good practice guidance.
  3. The SFHA is the voice of the principal builders and managers of new affordable housing for rent in Scotland. Housing Associations own and manage around 40 per cent of the country’s affordable rented housing stock, over a quarter of a million homes across Scotland.
  4. Housing associations and co-operatives are not-for-profit bodies regulated by the Scottish Housing Regulator.

MEDIA RELEASE posted by the Scottish Federation of Housing Associations. You too can post a media release (aka a press release) on For more information, email here.

Contact: Kirsten Walker
Phone: 0141 567 6221