But sector says increase is out of touch with housebuilding ambitions
The Scottish government has announced an additional £118m of funding for its affordable housing supply programme in its budget for 2026-27.
The increase in funds, from £808m in last year’s budget to £926m, will support the government’s goal to deliver 110,000 affordable homes by 2032.
However, Gillian McLees, Scotland director at the Chartered Institute of Housing (CIH), said that despite the increase there was “still some way to go to provide the social and affordable homes Scotland needs.”
She cited CIH research, commissioned jointly with Shelter Scotland and Scottish Federation of Housing Associations, which reported that £1.64bn is needed per year to fulfil the government’s affordable homes delivery ambitions.
She also urged the government to “continue investing in homelessness services while working towards developing the detail on the new homelessness prevention duty.”
Meanwhile, Jane Wood, chief executive of representative body Homes for Scotland said housebuilders have been left “frustrated” by the budget’s “lack of detail” on how it will support young people looking to buy their first home.
She said: “Support for first time buyers (previously provided by the First Home Fund) is absolutely fundamental. It remains to be seen whether this will be forthcoming to give young people the hope the Budget statement alluded to.”
She added that with “home building levels now at or near historic lows,” the announcement was a “missed opportunity to announce the bold initiatives that would significantly stimulate construction” and urged all parties to “come forward with policies which deliver the homes Scotland needs” ahead of May’s devolved parliament election.
The budget also outlined a new mansion tax due to come into effect by April 2028 for homes valued over £1m as well as the creation of two new higher council tax bands for properties between £1m and £2m and above £2m.
Iain Murray, head of operational living at real estate adviser Bidwells and chair of the Association of Rental Living in Scotland, said that the new measures will be “closely watched by the property sector as the detail on valuation, implementation and scope emerges.”
He added: “However, the bigger challenge in Scotland remains the housing emergency, which is fundamentally a supply issue.
”This budget is light on measures that directly accelerate delivery, particularly in the rented sector where demand continues to outstrip supply in Scotland’s major cities. Build-to-rent - that is, purpose-built, professionally managed rental homes - can play a meaningful role here.
“The next step for Holyrood should be a focus on practical delivery measures, such as targeted support to unlock consented schemes, faster planning decisions, and infrastructure funding that increases the number of starts on site.”
The 2026-27 budget also ringfences £22.5bn for health and social care, a combined increase of up to £70m in resource and capital funding for colleges, more than £5bn to address the climate emergency and reduce carbon emissions as well as £4.3bn for transport, including investment in railways.
Shona Robison, finance secretary, said: “This Budget delivers for families across the country, for a stronger NHS, and for a more prosperous future. It will fund landmark policies to continue efforts to eradicate child poverty – investing in a brighter future for Scotland and the children growing up here.
“Almost £68bn is being invested in 2026-27 and almost £200bn through the Scottish Spending Review and Infrastructure Investment Pipeline, demonstrating the scale of our ambition for our nation.”
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