Scottish government’s affordable housing target faces shortfall

The Scottish government is unlikely to meet its target of delivering 110,000 affordable homes by 2032, according to new research.

Research by the Fraser of Allander Institute (FAI) workforce shortages and rising material costs are among the factors putting pressure on housebuilding and making the target increasingly difficult to achieve.

The news comes as the Scottish Association of Landlords (SAL) has warned that anti-landlord legislation is pushing landlords out of the private rented sector.

Capacity and workforce pressures

According to the research, across several different scenarios, the Scottish government is unlikely to meet either of its affordable housing commitments within the stated timescales.

Based on recent delivery trends, around 75,000 affordable homes could be completed by 2032, compared with the target of 110,000.

Ben Cooper, Economist Fellow at the Fraser of Allander Institute, said the research sets out the capacity pressures facing affordable housing delivery.

He said: “Our research provides an important and timely assessment of the challenges facing affordable housing delivery in Scotland. While the Scottish government’s targets reflect the scale of housing need across the country, our analysis shows that achieving these ambitions will be increasingly challenging without addressing the financial, workforce and capacity pressures affecting the housing and construction sectors.

“The report demonstrates that affordable housing delivery depends on a complex system of partners, funding mechanisms and market conditions, and highlights the need for policies that are responsive to the realities of delivery. We hope these findings contribute to a constructive conversation about how Scotland can best support the continued delivery of the affordable homes that are required.”

Wider challenges across the housing market

The research also reveals that building affordable homes is particularly challenging in rural areas, where construction costs are higher.

Scottish Federation of Housing Associations (SFHA), chief executive Richard Meade has urged the Scottish government to focus on the wider challenges in delivering affordable homes.

He said: “Despite the significant work of housing associations, local authorities and delivery partners to build the homes Scotland needs, there remains a significant gap between targets set by the Scottish government and the funding and capacity needed to deliver them”.

“Sustained, long-term investment is essential and welcome, but as well as increased funding we need concrete steps to address the wider systemic challenges across the housing and construction sector which remain considerable barriers to progress.

“Affordable housing is critical national infrastructure and should be funded and planned as such. That means multi-year public investment that tracks real costs, closer partnership across the delivery system, and specific attention to capacity across planning, construction, and in rural and island communities where costs are highest and the gap is widest. Only then can we begin to bridge these substantial gaps.”