Scottish Government announces £826m additional funding for affordable homes

Houses - Image credit: PA

The Scottish Government has announced £826m additional funding for affordable homes in next year’s budget.

The funding, which is a £70m increase on the current year, will be made available through the Affordable Housing Supply Programme.

However, this follows analysis published this week by the BBC that found 7,000 fewer homes a year are being built than are needed to keep up with demand.

According to the BBC report, there is a need for 23,000 new homes every year – or 25,000 if previous shortfalls are to be remedied – but only 18,000 homes were built in the 12 months to October 2018.

Commenting on the reported shortfall, Scottish Federation of Housing Associations (SFHA) chief executive Sally Thomas said: “While the finding of a 7,000 annual shortage in new housing is a wake-up call, it is not a complete shock.

“We know that many people now struggle to buy a home, as house prices have increased much faster than average wages, and private renting has tripled since 1999, leading to an affordability gap.”

The SFHA has set out three actions that it says would help increase the supply of new homes and resolve Scotland’s housing shortage over the long term.

It wants to see continued grant investment in new build affordable housing at present levels, planning and land reform to provide affordable land for housing development, and reform of the housing system so that a range of affordable housing is available to meet people’s changing needs throughout their lives.

The body, which represents housing associations in Scotland, has called for all political parties to continue funding for social and affordable housing at the same levels beyond this current parliament and for reforms allowing land to be transferred for affordable housing development at existing use value.

Responding to the increase in funding, Thomas added: “While we welcome the Scottish Government’s funding of £826 million, which is part of its commitment to build 50,000 affordable homes, we would urge the government, and all political parties, to commit to a longer-term programme of delivery beyond the lifetime of this parliament.

“It is vital that the post-2021 Affordable Housing Supply Programme maintains the existing levels of funding to meet outstanding and future need.

“As well as longer-term funding, it is equally important that we ensure we have the right homes, in the right places, to meet people’s needs and aspirations.”

The Scottish Government has committed to building 50,000 affordable homes in the course of this parliament, 35,000 of which must be for social rent.

Communities secretary Aileen Campbell said: “At the heart of our ambition for a Fairer Scotland is that everyone has access to a safe, warm and affordable place to call home.

“This increased budget forms part of the single biggest investment in, and delivery of, affordable housing since devolution with over £3 billion committed which will deliver good quality, secure and affordable homes, which will in turn help create strong, sustainable communities. 

“We have set an ambitious target to deliver at least 50,000 affordable homes over the course of this Parliament, including 35,000 for social rent and are making good progress towards that.

“By ensuring councils and housing associations have financial certainty we are confident that this commitment can be fulfilled.”