Scottish housing groups call for ‘urgent investment’ of up to £9.2bn in grant funding

By modelling a set of “plausible inflationary scenarios”, CIH Scotland, SFHA and Shelter Scotland estimate that the funding “should be within the region of £8-9.2bn”.

This is to fund the report’s projected gross affordable housing requirement for Scotland for 2026-31 of 15,693 homes annually.

The report said this is nearly a 50 per cent increase in estimated need relative to the groups’ 2020 report and would “necessitate a significant increase in the nominal Scottish affordable housing delivery target of 10,000 homes per annum”.

Sally Thomas, outgoing chief executive of SFHA, said: “The research is clear: ending the housing emergency is going to require building a lot more social homes and a radical and sustained increase in the housing budget.

“Put simply, we need around 15,693 social and affordable homes per year and total public investment of at least £8.2bn over the course of the next parliament.

“Housing associations deliver secure, warm and affordable homes in communities across Scotland, and they could build so much more. Policymakers now have the blueprint to support them and that can begin with a realistic funding settlement by the government across several years to give them the certainty needed to invest, borrow and build.

“The cost of inaction means more homelessness, more children growing up in temporary accommodation and more dreams shattered by a housing system which grows ever more unaffordable.”

Callum Chomczuk, national director of CIH Scotland, said: “The summary report headlines show Scotland needs 15,693 social and affordable homes every year between 2026 and 2031; by contrast we only delivered 8,188 homes in 2024. This means an almost doubling of what we deliver.

“A commitment to this target will require a step change in how we deliver and fund social housing in Scotland.”

Alison Watson, director of Shelter Scotland, said the research shows the “devastating impact of decades of underinvestment in housing”.

“While homelessness and social housing need is increasing rapidly, we’ve failed to deliver the homes needed,” she said.

“Today, 10,360 children are trapped in temporary accommodation, and 2.3 million adults are impacted by Scotland’s housing emergency. Scotland urgently needs an action plan with long-term investment to fix a broken and biased system. At least 15,693 affordable homes a year is the bare minimum if the Scottish government is serious about tackling homelessness and getting children out of harmful accommodation. We simply cannot afford not to do it.

“Social housing providers consistently deliver on time, on budget and bring economic returns. However, billions are spent each year on transport and IT projects that do not offer the same social, economic or well-being benefits as social housing.

“The only option is to invest in and deliver more social homes. Scotland cannot afford to lose another decade of housing.”

The report said the drivers of housing need include increased homelessness, higher numbers of households “inadequately” housed in private tenures and recent spikes in rental inflation. Other reasons include “persistent affordability pressure” and a decline in the number of properties becoming vacant within the housing stock.

“Given the composition and drivers of need, the predominant focus of affordable housing supply should remain social rented housing,” the report said.

“The increased level of affordable housing need is, therefore, reflective of several acute challenges converging within the Scottish housing system. But these challenges have also emerged at a time when new housing supply – both private and social – is falling.”

In 2024-25, there were 4,775 approvals, 5,424 starts and 7,444 completions of affordable homes funded by the Scottish government’s AHSP.

The Scottish government’s Budget for 2025-26 allocated £767.7m to the AHSP for the year, reversing a previous £200m cut to the country’s housing budget.