Scottish Government Commits £768M to Affordable Housing in 2025-26 Amid Calls for Greater Ambition
The Scottish Government has announced plans to increase funding for the Affordable Housing Supply Programme to £768 million in 2025-26, marking a £200 million rise compared to this year’s budget. The move aims to tackle Scotland’s ongoing housing emergency and provide a much-needed boost to the availability of affordable homes.
Speaking at an affordable housing development in Haddington, East Lothian, Housing Minister Paul McLennan highlighted the government’s ambition to deliver at least 8,000 new properties for social and mid-market rent and low-cost home ownership. The Minister also emphasised additional funding to prevent homelessness and repurpose empty properties as part of a broader effort to increase the availability of affordable housing.
But while the increase in funding has been welcomed by housing providers, local authorities, and third-sector organisations, there are questions about whether the proposed measures go far enough to address the scale of Scotland’s housing crisis.
The Scottish Government's draft Budget outlines several key areas for housing investment:
Affordable Housing Supply Programme: The total budget for affordable housing will increase to £768 million, with the aim of delivering at least 8,000 new homes. This funding supports social housing, mid-market rent, and affordable home ownership.
Homelessness Prevention: An additional £4 million will be made available to support local authorities and frontline services to prevent homelessness.
Empty Property Transformation: £2 million will be used to convert empty properties into safe, warm, affordable homes. This measure seeks to reduce housing shortages while making use of existing infrastructure.
Sustaining Tenancies: £1 million will be distributed this financial year to registered social landlords and third-sector partners to help sustain tenancies and prevent evictions.
These measures represent a comprehensive approach to addressing different aspects of Scotland’s housing emergency. From constructing new homes to repurposing existing empty properties, the plan attempts to increase housing stock and tackle the root causes of homelessness.
The Housing Minister was keen to frame this announcement as part of a long-term success story. Since 2007, the Scottish Government claims to have delivered 133,000 affordable homes, significantly outpacing England and Wales on a per capita basis.
Paul McLennan framed the increased investment as part of a broader strategy to reduce child poverty. He said:
“Investing in safe, warm and affordable homes is key to our top priority to tackle child poverty.”
The government's claim that it has delivered 45% more affordable homes per head than England and 70% more than Wales highlights Scotland’s relatively strong track record. However, this statistic alone doesn't provide a full picture of the ongoing demand for affordable housing.
The move has been welcomed by local authorities, especially in areas where housing demand is at its highest. Councillor Andy Forrest, East Lothian Council's spokesperson for housing, described the new funding as essential for sustaining future housing programmes in the region:
“We welcome the announcement of more subsidy funding for affordable housing and any additional revenue for frontline services to help prevent homelessness.”
East Lothian has been one of the areas most affected by Scotland’s housing crisis. Rising house prices and growing demand for social housing have put pressure on local councils to expand their affordable housing stock. Certainty over funding is essential for councils to plan and execute their future housing programmes.
While the Scottish Government's commitment to affordable housing is commendable, some observers argue that it still falls short of the true scale of the crisis.
Is 8,000 Homes Enough?
Critics have noted that 8,000 homes annually may not be sufficient to meet demand, especially with the rising number of people on social housing waiting lists.
The housing charity Shelter Scotland has previously called for at least 38,500 social homes to be built by 2026 to meet growing demand. While the government’s plan will contribute to this goal, it’s clear that more investment will be required in future years.
Reliance on Empty Property Conversions
The allocation of £2 million to convert empty properties has been praised for its efficiency, as it avoids the higher costs of new builds. However, critics have argued that £2 million won’t go far in terms of refurbishment costs.
Transforming an empty property into a habitable home can be costly, especially if the building requires significant structural repairs or modernisation.
Sustaining Tenancies
The £1 million allocated to support tenancy sustainability will undoubtedly help prevent evictions, but critics question whether this is enough to address the scale of the problem.
With the cost of living crisis continuing to push people into financial hardship, the risk of rent arrears and evictions is rising. Some have called for stronger rent controls and more support for tenants facing financial hardship.
Prevention Over Cure
The additional £4 million to prevent homelessness is a welcome step, but many argue that it’s a case of “too little, too late.” Homelessness charities have long advocated for more preventative action, and while this funding is a step in the right direction, it will likely only scratch the surface of what’s needed.
While the policy is undeniably positive, there are several areas where it could be improved:
Uncertainty of Long-Term Funding: While the government has outlined its commitment for 2025-26, there is little clarity on what happens beyond that. Housing charities and councils need assurance that funding will remain at these levels to enable long-term planning.
Over-Reliance on Conversion Projects: Transforming empty properties into affordable housing is a great idea in principle, but many empty properties are in disrepair or unsuitable for housing. Without additional investment, this approach may fall short of expectations.
Limited Homelessness Support: While the additional £4 million for homelessness prevention is welcome, it’s unlikely to address the structural causes of homelessness. A larger and sustained focus on mental health support, employment services, and affordable housing supply is needed to reduce homelessness in the long term.
The Scottish Government’s pledge to increase the Affordable Housing Supply Programme to £768 million is undoubtedly a step in the right direction. The funding boost will help deliver 8,000 new homes, prevent homelessness, and transform empty properties into affordable housing.
However, questions remain about the sufficiency of funding and the scale of ambition. With 38,500 homes needed by 2026 according to Shelter Scotland, the government’s plan appears ambitious but incomplete. Furthermore, while repurposing empty homes is a cost-effective solution, the scale of this funding may not be enough to make a significant dent in Scotland's housing shortage.
The broader issue is that housing demand in Scotland is growing faster than supply, and the support announced in this draft Budget, while welcome, might not be enough to close the gap. For councils like East Lothian, the clarity of funding is a relief, but many will be watching closely to ensure the government delivers on its promises.
If this funding increase is sustained beyond 2025-26, and paired with broader efforts to address homelessness and affordability, the plan could mark a transformational moment for Scotland's housing sector.
