The Scottish Government has increased funding for affordable housing with a budget of £768 million next year. This blog takes a closer look at the budget plans.
A previous SPICe blog looked at the 2024-25 affordable housing budget. Another SPICe blog provides an initial reaction to the 2025-26 budget.
What does the Affordable Housing Supply Programme budget do?
The Scottish Government’s Affordable Housing Supply Programme (AHSP) budget provides funding for:
- housing for social rent provided by registered social landlords (RSLs) and councils
- housing for affordable home ownership
- mid-market rented housing (i.e. housing above social rent levels but below market rent levels).
Funding through this programme is crucial to fulfil the Scottish Government’s long term commitment to deliver 110,000 affordable homes by 2032 (of which 70% will be available for social rent and 10% will be in remote, rural and island communities).
A budget cut for 2024-25
At Budget time last year, the Scottish Government announced a cut to the AHSP. In April 2024, further resources were added bringing the final budget to almost £600 million in 2024-25, a cut of 22% from the previous year.
Given the parliament’s declaration of a national housing emergency in June 2024, and additional resources for Scotland as a result of the UK Government’s Budget, pressure had mounted on the Scottish Government to increase the affordable housing budget next year.
A budget increase for 2025-26
The AHSP budget in 2025-26 is £768 million – a real terms increase of 26% from this year (see Table 1).
In the Budget statement, the Cabinet Secretary for Finance and Local Government. Shona Robison MSP, stated that the Budget “returns spending to a level higher than it was at two years ago.” However, in real terms (at 2024-25 prices), the overall budget is 3% lower than it was in 2023-24.
Table 1: Affordable Housing Supply Programme budget, cash terms and real terms, 2024-2025 prices
| 2021/22 | 2022/23 | 2023/24 £m | 2024/25 £m | 2025/26 £m | |
| £m | £m | ||||
| Cash terms | 832 | 831 | 752 | 596 | 768 |
| Real terms (24-25 prices) | 968 | 903 | 770 | 596 | 750 |
Sources: 21-22. 22-23, 23-24, 24-25 Scottish Government level 4 budget data and Scottish Government news release April 2024. Real terms figures calculated using HM Treasury GDP deflators October 2024. Note that for years prior to 25-26 the figures are final year budget figures, in year additions can be made.
The Cabinet Secretary also announced that the Government would be, “working with Edinburgh City Council to unlock over 800 new, net zero homes at their Granton development site”. The Government hopes to announce further details on the deal to support this project early in the 2025-26 financial year.
Progress towards long term affordable housing supply targets
The Scottish Government monitors progress towards the target from 23 March 2022, as this was when the previous 50,000 target was completed.
Of the total homes delivered so far:
- 17,289 (76%) were for social rent
- 3,219 (14%) were for mid-market rent
- 2,235 (11%) were for affordable home ownership.
The future number of affordable homes completed will depend on how many new homes have been approved and how many homes have started to be built on site.
In the year to the end of June 2024, the number of affordable homes approved was 6,239, a fall of 1% from the previous year. The number of homes started was 6,046, a fall of 20% from the previous year.
With under 8 years of the target to go, there has been some scepticism that the target can be met. However, the Scottish Government remains committed to keeping the target and is currently reviewing its deliverability.
Initial reaction to the budget
Initial reaction to the increased housing supply budget appears positive. But there also appears to be a consensus about the need for longer term investment certainty. For example, CIH Scotland welcomed the additional funding but said, “…we also need the government to prioritise and maintain a long-term focus on housing in Scotland.”
Parliament now moves to detailed scrutiny of Scottish Government plans, beginning next week in Committees and the Parliament will vote on the Budget early next year.
Kate Berry, Senior Researcher SPICe