In an underfunded market, smaller Scottish housing associations must find a way to deliver more properties without compromising their social principles, says Simon Graham.
The Scottish government’s publication of a Housing Emergency Action Plan in September was the latest example of the revived prominence given to social housing in Scotland since John Swinney became first minister in May 2024.
His government declared a ‘housing emergency’ in the country that same month. More than one in 20 Scots are now on a housing waiting list and the number of children living in temporary accommodation has risen above 10,000.
This summer, Swinney went further, creating a new cabinet level post of housing secretary and increasing the housing budget for 2025/26 by £200million, reversing the 26% cut for 2024/25 implemented by his predecessor, Humza Yousaf.
The new Housing Emergency Action Plan will see £4.9billion invested in delivering 36,000 new affordable homes by 2029/30, with three principal aims: supporting growth and investment in the housing sector; a stop to children living in unsuitable accommodation; and supporting the housing needs of vulnerable groups.
For all the Scottish government’s goodwill and positive intent however, it is unlikely to be enough. The day before the Action Plan was published, a new report on housing need from the Scottish Federation of Housing Associations, Shelter Scotland and the Chartered Institute of Housing Scotland called for £8.2billion of funding over the next five years to produce 78,465 social and affordable homes – double what the government is proposing.
The report found a near 50% increase in the estimated level of housing need compared to the same analysis five years ago. The average 15,700 new social and affordable homes a year required is more than twice the 7,444 homes delivered through the Scottish government’s Affordable Housing Supply Programme in 2024/25, while the new emergency plan only ups this to around 9,000 a year.
The three organisations said the key challenges are increased homelessness, higher numbers in poor quality private accommodation, soaring rents, affordability pressures, and fewer social homes for letting becoming available from the existing stock as people stay put in uncertain times.
If these problems sound familiar to those of us living south of the border, it is worth noting also how different the Scottish housing context is in some respects, not just in the scale of its problems, but also in housing providers’ ability to deal with them.
The population of Scotland is around 5.5 million people, slightly smaller than that of the south-west of England; we are looking at somewhere equivalent to one English region (despite Scotland’s geography being so much greater).
The social housing sector is bigger, comprising 23% of all homes (against 16% in England), with nearly half of them managed by Scotland’s 150 housing associations and cooperatives (roughly 10% of the number of associations in England). The average housing association there manages fewer than 2,000 homes and, Glasgow-based Wheatley Group aside, very few have more than 10,000 homes.
Wheatley with its 95,000 homes, many originally derived from the transfer of Glasgow Council’s housing stock in the early 2000s, is the glaring outlier and it dominates development among its Scottish peers. Last year, it completed 844 new homes, with two-thirds of them (563) for social rent, easily the highest proportion of any housing association in the UK.
Scottish associations generally build far more for social rent and far less for shared ownership than their English counterparts, supported by higher grant rates and a less ideological policy approach, with a stronger political consensus around the need for social housing. The vast majority of English HAs barely develop 20-25% for social rent, though this should start to improve under Labour’s new programme.
Yet Wheatley’s development numbers are still only enough to place it 19th in the league table of the UK’s biggest affordable housing developers – the only Scottish association to appear in the top 50. The small size of most Scottish providers is a significant constraint on their ability to borrow privately and develop and is contributing to the country’s growing housing problems. Unlike in England, few have gone down the merger route to facilitate greater economies of scale.
Beyond Wheatley, some of the biggest affordable housing developers in Scotland are the regional arms of large England-based associations, like Places for People, Home and Riverside. These organisations have the financial clout to manage larger and more difficult developments. Places for People, for example, is currently leading the development of a new 5,000-home community at Tornagrain, near Inverness, and managing complex major regenerations, such as the 386-home scheme with leisure facilities at Edinburgh’s old tram depot, The Engine Yard.
More broadly, most Scottish associations are much less affected by the huge, costly management and repairs issues English associations are now grappling with. Their smaller scale and often localised focus, plus a stronger tradition of deep resident involvement including on boards, has led to better maintained stock. Latest figures from the Scottish Housing Regulator show 85% of residents happy with their affordable homes, 82% considering the rent good value for money, and 84% satisfied with neighbourhood management, figures most English housing associations would kill for.
The conundrum now for Scottish social landlords is how to keep those core housing management principles and the investment in existing stock going, while also finding the money to boost development and deal with the increasing levels of housing need becoming apparent. For many, the time is rapidly approaching where they must think bigger and more laterally about managing the growing challenges they face.
