Scottish landlords warn of ‘multibillion funding gap’ to tackle housing emergency

Ms Harji pointed to SFHA research showing that Scotland must build more than 78,000 new homes by 2031 to meeting housing need. However, the trade body has said this will cost “at least” £8.2bn.

“It’s crucial this is made up of public money, so housing associations can then use it to leverage in additional private finance,” Ms Harji added.

The average cost of building a social home in Scotland between 2019 and 2023 jumped by around 30% to £195,077, according to the SFHA.

Some housing associations currently face costs of up to £300,000 per home for small-scale projects, specialist housing or schemes in remote and rural areas, the trade body said.

Figures published this month revealed that the number of social homes started in Scotland was at its lowest level since records began in 1997.

In May 2024, Scotland declared a national housing emergency, which was followed by councils declaring the same position over a severe lack of homes. 

As such, the SFHA’s report has called for a government commitment to invest £8.2bn into the Affordable Housing Supply Programme over the next parliamentary term, up to 2031, which equates to £1.64bn annually.

The body also wants to see a commitment to delivering 15,693 homes per year over the next parliament, with at least 75% for social rent.

Speaking exclusively to Inside Housing last month, Scottish housing secretary Màiri McAllan said the devolved administration is aiming for 70% of the 36,000 affordable homes being delivered by 2030 to be for social rent. However, she admitted that the target is “very stretching”.

The SFHA wants to see a promise for multi-year settlements for the Affordable Housing Supply Programme.

The body is also calling for a “greater degree of policy certainty” around building safety, accessibility and energy efficiency as part of a more “co-ordinated and holistic approach” to implementing policies.

The SFHA warned that the new measures, such as the Social Housing Net Zero Standard, are an “increasing risk for housing associations and hampering efforts to deliver new homes”. 

Ms Harji added: “While we fully support individual standards which can support Scotland’s social tenants, improve energy efficiency and overall health and safety, there must be a co-ordinated approach which provides the sector with certainty.”

A Scottish government spokesperson said: “We have a strong track record in affordable housing, having delivered more than 140,000 affordable homes, with over 100,000 for social rent. This is 47% more per head of population than England and 73% more than Wales as of March 2024.

“Last month we published the Housing Emergency Action Plan, which ensures that £808m will be available for affordable homes in Scotland this year. This includes increasing our acquisitions fund to £80m – bringing the total of our additional targeted investment to £120m since the emergency was declared.

“This plan also sets out a commitment of up to £4.9bn through a mix of public and private-sector leveraged investment over the next four years to help support the delivery of around 36,000 affordable homes and provide up to 24,000 children with a warm, safe home.”

The spokesperson also pointed to the government’s Housing (Scotland) Bill, which will allow councils to increase the council tax premium on second homes and implement changes to the planning system, including a new notification direction to planning authorities.