Development of Affordable Housing in Scotland – A thematic inquiry

The development of affordable housing is a crucial aspect of addressing housing needs and promoting social equity. This report delves into the thematic inquiry on the development of new affordable housing in Scotland, aiming to identify and share positive practices to assist Registered Social Landlords (RSLs) and local authorities in their development approaches. The inquiry examines the entire development process, from strategic decision-making to the completion of new affordable homes, while considering risks, constraints, and project management issues.

In 2016, the Scottish Government made a significant commitment to deliver 50,000 affordable homes over the parliamentary term from 2016 to 2021, with 35,000 of these homes designated for social rent. This ambitious target was supported by a range of measures, including a commitment of over £3 billion in public subsidy over the five financial years. The funding was aimed at facilitating increased development through various initiatives such as the Rural and Island Housing Fund, which focused on increasing the supply of affordable rural housing. Additionally, support was provided for mid-market rent initiatives and affordable home ownership, highlighting the government’s comprehensive approach to addressing diverse housing needs.

The development process of affordable housing involves several stages, starting with a strategic decision to develop. This decision should be grounded in a clear understanding of housing needs and aligned with broader strategic objectives. For RSLs and local authorities, this means integrating development plans with existing business strategies to ensure coherence and effectiveness. The process also includes agreeing on and managing development programs, which requires careful planning and coordination to address potential risks and constraints. The final stage involves the completion of new affordable homes, marking the culmination of a complex and multifaceted development journey.

Achieving the target of 50,000 affordable homes represents a significant challenge, given that just over 30,000 homes were completed in the previous five years by RSLs and local authorities. However, this ambitious goal also presents an opportunity for growth and innovation in the affordable housing sector. Many existing developers have already decided to expand their programs to help meet the targets, indicating a willingness to rise to the challenge. The increase in development programs and the number of RSLs planning to build more homes suggest a positive trend towards meeting the housing needs of the population.

To support the development of affordable housing, the report identifies several positive practices that RSLs should consider. These practices are aimed at ensuring compliance with regulatory standards and achieving value for money. For instance, RSLs are encouraged to have a clear strategy for development that aligns with their overall business objectives. This includes allowing sufficient time to consider development opportunities and risks, as well as incorporating a strategic and integrated approach to asset, risk, and treasury management. The regulatory framework emphasizes the importance of robust financial planning and governance to ensure the sustainability and effectiveness of development projects.

The development of affordable housing in Scotland is a multifaceted endeavor that requires strategic planning, careful management, and a commitment to meeting the housing needs of the population. The Scottish Government’s commitment to delivering 50,000 affordable homes by 2021, supported by substantial funding and various initiatives, underscores the importance of this issue. By identifying and sharing positive practices, this report aims to assist RSLs and local authorities in their development efforts, ultimately contributing to the goal of providing more affordable housing options for those in need.