How is the Scottish Government making sure more houses will be built in Scotland

26th May 2025

The Scottish Government is working on a multi-pronged approach to boost housebuilding across the country.

At the heart of its strategy is the commitment to its long-term target—to deliver 110,000 affordable homes by 2032—through initiatives like the Affordable Housing Supply Programme.

This programme channels significant funding (recently increased to around £768 million) into building new social homes, mid-market rentals, and schemes that help first-time buyers such as the Open Market Shared Equity Scheme.

This financial backing supports local authorities and housing associations in planning and delivering construction projects while also aiming to transform empty or unused stock into livable homes .

In parallel, the government's longer-term vision is encapsulated in strategies such as "Housing to 2040." This plan lays out a roadmap for creating safe, high-quality, and affordable housing over the coming decades by aligning urban planning, community needs, and post-pandemic recovery efforts. By engaging with communities and integrating local needs into broader policy frameworks, the government hopes to turn its vision into concrete progress on the ground .

Policy reforms also play a central role. The government is considering legislative measures—including aspects of the Housing (Scotland) Bill—to introduce homelessness prevention measures and even elements like long-term rent controls. These measures are designed not only to support the construction of new homes but also to provide stability for those already in temporary accommodation and to ensure that the housing market functions more equitably.

Moreover, local initiatives are encouraged through detailed local strategies and resource planning assumptions that help tailor national objectives to regional circumstances.

It is worth noting that while these initiatives represent a robust effort, there has also been criticism from housing groups and some MSPs who argue that the pace of build and the current measures might not be enough to resolve the housing emergency. They call for the development of a clear, actionable, and fully funded Housing Emergency Action Plan with measurable milestones. In response, the government emphasizes its increased investment and a collaborative, whole-systems approach aimed at gradually meeting its ambitious targets.

Beyond these direct measures, there's an ongoing dialogue on how best to balance new construction with policies that make better use of Scotland's existing housing stock, reduce temporary accommodation reliance, and support community-led housing initiatives. This holistic perspective is essential not only for increasing the number of homes but also for ensuring that the built environment is sustainable, affordable, and conducive to healthy communities.

Interested in more? You might explore further how local authorities are adapting their own housing plans and how innovative public-private partnerships are being used in town planning and redevelopment projects to tackle not just quantity but quality in Scotland's housing stock.

The Affordable Housing Supply Programme (AHSP) is a comprehensive, multi-layered funding mechanism designed to boost the production of affordable homes across Scotland. At its core, the programme channels public funds through a variety of grants and financial instruments to support the delivery of new housing—in particular, homes for social rent, mid-market rent, and low-cost home ownership.

The intention is not only to encourage new builds but also to help acquire and repurpose existing properties to better meet the country's diverse affordable housing needs. This approach ensures that local authorities and registered social landlords have the resources required to develop homes that are both high quality and affordable, thereby supporting the Scottish Government’s long-term target of delivering 110,000 affordable homes by 2032 .

The funding structure of the AHSP is notably robust and multifaceted. For example, the 2025-2026 period sees a budget of approximately £767.745 million. This total is broken down into several components, such as the More Homes Grant, a Transfer of Management of Development Funding (TMDF) grant mainly used in cities like Edinburgh and Glasgow, and an allocation for financial transactions that can be deployed as loans.

This mix of grant and loan funding provides flexibility; it enables local bodies to leverage supplementary funding sources—such as their own borrowing or private investments—to deliver projects. In addition, the programme uses defined affordable housing investment benchmarks to guide the appraisal of projects, ensuring the funds are used efficiently and effectively to drive both new developments and the refurbishment of older stock.

Beyond mere financial injection, the AHSP is structured to incentivize collaboration among local authorities, housing associations, and even national schemes. For instance, alongside new builds, the programme funds initiatives like the Open Market Shared Equity scheme, which is tailored for first-time buyers and those on lower incomes. It also supports rural and island communities, ensuring that even the more remote areas of Scotland can benefit from improved housing provisions.

This locally driven approach not only aims to tackle the housing crisis by directly increasing supply but also seeks to reduce homelessness and the overreliance on temporary accommodation through more strategic planning and resource allocation.

Additionally, the programme has a significant economic and social impact. Previous phases of the AHSP have been credited with creating thousands of jobs in the construction and related sectors, while also leveraging substantial economic output. This positive multiplier effect has been observed in various studies and reports, which underscore how large-scale investment in affordable housing not only addresses immediate housing shortages but also helps reinvigorate local economies and foster stronger, more resilient communities 3.

The More Homes Grant is a targeted funding mechanism under the Scottish Government’s broader housing framework. It is designed to provide flexible financial support to local authorities, housing associations, and development partners. By offering a grant that can kick-start the development of sites with high potential, the government aims to overcome some of the early-stage barriers—whether those be related to infrastructure, planning, or initial market uncertainties. Essentially, this grant is one of several tools used to unlock strategic housing sites that might otherwise face delays, ensuring that the drive to increase housing supply keeps momentum 2.

Within the wider context of increasing Scotland’s housing stock, the More Homes Grant works in tandem with other elements of the Affordable Housing Supply Programme. It allows local players to leverage additional funding sources, be they public or private, thus creating a multiplier effect that stimulates successful housing projects. For example, by providing initial capital to develop a site, the grant can help attract further investment, speed up planning procedures, and ultimately expedite the construction process.

This integrated approach is crucial for meeting the ambitious targets set out in Scotland’s long-term housing strategy .

Moreover, the grant embodies a flexible model of funding. Rather than being a one-size-fits-all solution, it’s structured to adapt to the varying needs of different regions across Scotland—rural communities, urban centers, and everything in between—ensuring that the unique challenges of each are met with an appropriate financial stimulus.

This flexibility not only aids in surmounting initial development hurdles but also aligns local housing strategies with national priorities, fostering a more resilient and inclusive housing market.

How does the More Homes Grant work with other housing initiatives?

The More Homes Grant is more than just an isolated funding measure—it’s a catalyst that complements and strengthens a suite of housing initiatives under Scotland’s broader strategy to boost affordable home delivery. Here’s how it works in tandem with other efforts:

Catalyst for Momentum and Investment The grant provides crucial early-stage funding to unlock projects that might otherwise stall due to initial financial or planning barriers. By activating these sites, the More Homes Grant not only helps cover upfront costs but also makes projects more attractive for additional investment from public, private, or third‐sector sources.

This catalytic role ensures that complementary funding streams—whether they’re from the Affordable Housing Supply Programme, the Housing Infrastructure Fund, or other local support mechanisms—can engage on a solid foundation to bring projects from the planning phase through to construction.

Integration within a Cohesive Housing Strategy Aligned with the Scottish Government’s larger frameworks like the Affordable Housing Supply Programme and the long-term vision of Housing to 2040, the More Homes Grant is designed to work in concert with other initiatives.

For example, while the Affordable Housing Supply Programme channels a broad array of funds to support construction and refurbishment, the More Homes Grant specifically targets early-stage site activation. This integrated approach minimizes delays and streamlines the transition from securing a viable site to ongoing development. Essentially, it ensures that every step of the housing delivery pipeline—starting from site selection and moving through to community integration—is financially and institutionally supported.

Regional Flexibility and Local Tailoring Recognizing the diversity in Scotland’s urban and rural landscapes, the More Homes Grant is structured to be flexible enough to address varied local challenges. Urban centers with high demand may use the grant to jump-start large-scale developments, while rural or remote areas might apply it to unlock smaller, yet crucial, projects that address localized housing needs. This adaptability means that the grant works hand in hand with region-specific policies and funding measures, ensuring that national objectives are met while still respecting local priorities and unique market conditions.

Enhancing Diverse Housing Models In tandem with other initiatives that promote social renting, mid-market rents, and affordable home ownership (such as shared equity schemes), the More Homes Grant plays a key role in diversifying the types of housing delivered. By reducing the risk at the early stages of project development, it paves the way for innovative models that might not otherwise secure necessary investment. This multifaceted approach helps create balanced communities where different forms of tenures coexist, all aimed at meeting the wider goal of providing safe, affordable, and good-quality homes for everyone.

Together, these integrated strategies help form a robust framework where the More Homes Grant is not just a funding tool on its own, but a vital component that strengthens, accelerates, and harmonizes with other housing initiatives across Scotland.