Scottish government to invest up to £4.9bn to deliver 36,000 affordable homes

The Housing Emergency Action Plan also includes a raft of planning reform. For example, it includes a ministerial notification direction to enable close monitoring of the implementation of national planning policy on housing, where a planning application is for 10 or more proposed new homes on land not allocated for housing. 

This will enable ministerial intervention where required and inform whether further policy action is required.

The plan also introduces a new all-tenure delivery ambition, working with the housebuilding sector to increase delivery across all sectors by at least 10 per cent each year over the next three years.

Housing will continue to be a “key focus” for the Scottish National Investment Bank, the Scottish government said. The bank will accelerate activity already underway to boost its housing pipeline, including through strategic partnerships, build-to-rent opportunities and lending to SME house builders.

The bank will explore new ways to blend commercial capital and public subsidy to unlock more urban and rural homes across tenures and also work with public bodies and landowners to support the delivery of more homes in rural and island communities.

The plan includes doubling the ‘voids and acquisitions fund’ from £40m to £80m to support social landlords to purchase properties to move families and children out of temporary accommodation.

The Scottish government will fund pilot schemes, including private sector leasing, to reduce the use of unsuitable temporary accommodation such as hostels, hotels and B&Bs, and invest up to £2m through the discretionary housing payments scheme. This will support households currently in temporary accommodation to find settled homes in the private rented sector.

For the private rented sector, the plan will introduce a long-term system of rent control to help make private rents affordable, subject to parliament agreeing the Housing (Scotland) Bill. The Scottish government said it intends to exempt, where appropriate, mid-market rent and build-to-rent properties, to protect and promote investment in those sectors.

The Scottish government will also set up a £1m national fund to help survivors of domestic abuse to leave an abusive partner.

Ms McAllan said: “Tackling the housing emergency will be a cornerstone in our efforts to achieve the Scottish government’s key priority of eradicating child poverty. I am determined this action plan will deliver positive and lasting change.

“At the heart of my mission is ensuring children are not spending time in unsuitable accommodation or long periods in temporary accommodation, that the housing needs of vulnerable communities are met, and that we create the optimum conditions for confidence and investment in Scotland’s housing sector.

“Our efforts so far since declaring a housing emergency have seen 2,700 families with children [move] into a permanent home, up to December 2024. Our action plan will see tens of thousands more families have a place they can call home.”

The Scottish government said it is “committed to addressing the housing emergency with urgency, ambition and collaboration”. It has called “on all partners across the housing sector, and beyond, to work alongside us as we take bold, co-ordinated action”.

“We cannot tackle this emergency alone, though, and I need everyone from across the private and public sector to pull together and deliver this plan to ensure everyone in Scotland has access to a safe, warm and affordable home,” Ms McAllan said.

Sector reaction

Housing bodies and charities have welcomed the Housing Emergency Action Plan but said it falls short of the required investment needed to deliver enough affordable housing in Scotland.

Callum Chomczuk, national director of CIH Scotland, said the plan “sets out a number of welcome priorities” that the group has called for in recent months.

He said: “We delighted that there is a commitment to exclude mid-market rent homes from rent controls, giving social landlords assurance to keep developing; the ‘fund to leave’ will help victims of domestic abuse leave an abusive home, the main cause of homelessness for women; and the additional £40m for acquisition – if new money – will support social landlords [to] buy properties to move families and children out of temporary accommodation. These are all to be applauded.

“The headline announcement of £4.9bn investment over four years for social and affordable housing is a step in the right direction. The commitment to multi-year funding provides confidence to social landlords and developers, creating jobs, economic growth and providing homes for those who need them.”

However, Mr Chomczuk noted in the report published yesterday from CIH Scotland, Shelter Scotland and the Scottish Federation of Housing Associations (SFHA) that £8.2bn is needed over the next five years to build the 78,465 social and affordable homes Scotland needs by 2031.

“£4.9bn is welcome demonstration of intent, but it fails to meet Scotland’s social and affordable housing need and resolve the housing emergency,” he said.

“We hope the Housing Emergency Action Plan published today sets the tone for a cross-party consensus on housing policy for Scotland, and that our MSPs build on the priorities set out by the Scottish government today and prioritise the financing of more than 75,000 social and affordable homes in the next parliament. This is required so that everyone in Scotland has a secure, affordable home.”

Sally Thomas, the outgoing chief executive of the SFHA, said it is “greatly welcome” that the cabinet secretary has listened to the group and announced a four-year commitment for Scotland’s housing budget.

The body said the sector now needs further details on how much of this £4.9bn commitment is public money and will be for affordable rented homes.

Ms Thomas cited the research from SFHA, CIH Scotland and Shelter which revealed that Scotland must build more than 15,000 social and affordable homes per year to meet housing need, which will require at least £8.2bn in public funding over the next parliament.

She said: “We trust further details of this funding commitment will be set out in the Scottish Budget. In terms of immediate steps, removing the threat of rent controls from MMR [mid-market rent] homes is welcome. This has followed sustained pressure from SFHA as housing associations have repeatedly made clear that rent controls make these developments unviable.

“Increased funding for homeless prevention is another sensible measure and housing associations look forward to building on their proud record of tackling homelessness through delivering secure, warm and affordable homes.”

Alison Watson, director of Shelter Scotland, said that there is “much to welcome in today’s action plan”, including more money for councils, but that it falls short on delivering the new social homes needed to stop homelessness rising.

She added: “[The] devil will be in the detail. There is no confirmation of new money to build the extra homes needed. There is no clarification about if the new money for buying homes is new money or money previously earmarked for new build. There was no mention as to whether the Scottish government remains committed to its 110,000 affordable home target by 2032.”