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Scotland restores affordable homes budget after year of cuts
The Scottish government has restored its affordable housebuilding programme to £768m for 2025-26, after it was cut this year by a quarter.
In Scotland’s latest Budget on Wednesday 4 December, finance secretary Shona Robison said the new funding would deliver 8,000 affordable homes next financial year.
The £768m allocated to the Affordable Housing Supply Programme (AHSP) for 2025-26 represents an increase of 38% compared to the current financial year’s budget of £556m.
However, it is a rise of just 2% compared to 2023-24’s budget of £752m.
Ms Robison said: “We’re going to ramp up action on housing, investing £768m in affordable homes. That enables over 8,000 new properties for social rent, mid-market rent and low-cost homeownership to be built or acquired this coming year, and it returns spending to a higher level than it was two years ago.”
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She added: “We recognise… that having a warm, safe, affordable place to live is critical to tackling child poverty.
“Far too many families are still in temporary accommodation. Shirley-Anne Somerville [cabinet secretary for social justice] has told me about the conversations that she’s had with mums who feel the pain of bringing up their kids in inadequate accommodation.”
Scotland received an overall boost of £610m to its capital budget from the UK Budget in October.
Ms Robison also said that the Scottish government would work with City of Edinburgh Council to unlock “over 800 new net zero homes” at its Granton development site.
The waterfront development is one of Scotland’s biggest brownfield sites, with potential for around 3,500 new homes.
Documents released alongside the Scottish Budget said that “progress towards the delivery of 110,000 affordable homes by 2032 will continue”.
A commitment of £4m was made for homelessness and prevention pilots. Meanwhile, £52.2m has been set aside for cladding remediation in 2025-26, up from £41.3m in 2024-25.
This year’s Scottish Budget is the first to be delivered with the Scottish National Party (SNP) as a minority government, after its coalition with the Green Party was abandoned.
The SNP will therefore be reliant on other parties to vote for the measures, raising the potential for concessions in the coming weeks.
“If we want progress on housing, on learning, on free school meals, on breakfast clubs, this parliament has got to vote for it,” Ms Robison said.
The SNP is also set to lift the two-child benefit cap in 2026, which was put in place by the UK government and extended under Labour.
“We’ve waited but Labour hasn’t delivered – this SNP government will,” said Ms Robison.
Sally Thomas, chief executive of the Scottish Federation of Housing Associations (SFHA), said: “It is hugely welcome that the Scottish government has listened to SFHA and partners and reversed last year’s hammer-blow cut.”
She added: “We look forward to working constructively with them to explore how they can provide a multi-year funding settlement for housing following the UK government’s Spending Review next year.
“It’s only with sustained public investment that Scotland can benefit from the full potential of our housing associations to tackle the record levels of homelessness, reduce poverty, boost economic growth, and chart a roadmap out of our housing emergency.”
Callum Chomczuk, national director of CIH Scotland, said: “We welcome the prioritisation of social and affordable housing in this year’s budget and funding of £768m to deliver the social and affordable homes Scotland needs. This money is essential to tackle the housing emergency, kick start our building programme and deliver the homes we need to tackle homelessness.
“However, we also need the government to prioritise and maintain a long-term focus on housing in Scotland. The restoration of £200m more for affordable housing means we are still spending less in real terms than the budget in 2023/24, which was lacking at that time.
“Since then, we have had 13 local authorities and the Scottish Parliament all declare housing emergencies, alongside horrifying levels of homelessness presentations and children living in temporary accommodation.
“Today’s budget must be the start of a long term and cross-party consensus on building social and affordable housing.”
Greg Reed, chief executive of Places for People, said: “The finance secretary’s injection into the Affordable Housing Supply Programme – reversing the devastating 2023 cuts to the budget – will pave the road to recovery for housing in Scotland”.
He added: “A focus on existing homes is also urgently needed. A current shortfall of £20m is preventing suitable adaptations to many homes – such as stairlifts and ramps – meaning too few properties meet customers’ needs.”
Alison Watson, director of Shelter Scotland, said: “We welcome the Scottish government’s acknowledgment that last year’s cut to the affordable housing budget was a mistake.
“Since then, misery has needlessly been inflicted on thousands of households who have had to live first through the distress of losing their homes, and then having nowhere to turn because local services have been decimated.
“Today’s reversal of the cuts to housing and investment in local services are welcome. Now it is time for a step change in how the Scottish government tackles Scotland’s housing emergency and the pace at which it does so.”
David Melhuish, director of the Scottish Property Federation, said: “We welcome the return of the housing budget cut last year by £200m, but we need to see further improvement to the Housing Bill on the issue of in-between tenancy rent controls, if we are to unlock over £2.5bn of investment that could quickly bring forward over 15,000 new homes.”
Earlier this month, it was announced that every pensioner household in Scotland will receive a winter heating payment, in contrast to the UK government’s pledge to remove the universal benefit.
Ms Somerville also announced a £41m package of support for people struggling with energy costs this winter. The measures include £20m to councils to provide support under the Scottish Welfare Fund.
Also, an additional £20m will be invested in Warmer Homes Scotland, the national fuel poverty scheme that helps people install energy efficiency measures and more efficient heating systems.
