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Scotland's Budget commits millions towards affordable homes target

Thursday 13 December 2018

Speaking yesterday, Finance Secretary Derek Mackay MSP, presented his 2019-20 Budget to the Scottish Parliament, setting out his proposed spending plans for the forthcoming year.

As well as an elaborate tax regime and a focus on health, education and business support, housing featured heavily in the Government's draft fiscal plans.

The budget expressed that everyone in Scotland should have access to a good quality, safe, warm, affordable home, and put forward proposals for how the Government plans to go about delivering on that promise.

Providing affordable homes

Mr Mackay committed more than £825 million, as part of a total investment of over £3 billion over the next five years, to deliver on the Scottish Government’s target for 50,000 affordable homes over the course of the Parliament.

There were also real terms increases in funding for local government and an increase in the additional home supplement from three per cent to four per cent.

In partnership with councils, housing associations and developers, government investment in housing will, on average, leverage economic output in the region of £1.4 billion per year, supporting around 10,000 to 12,000 jobs per annum in the construction and related industries in Scotland. House builders in Scotland also have access to the Building Scotland Fund to boost their activities. 

In addition, the Government will continue its support for the Rural and Islands Housing Funds and will extend home ownership to more families by extending its ‘Help to Buy and Open Market Shared Equity’ schemes.

Bringing an end to homelessness

The ‘Ending Homelessness Together: High Level Action Plan’, published in partnership with the Convention of Scottish Local Authorities (COSLA) at the end of November, made rough sleeping a national priority for the Scottish Parliament.

The budget reiterated the Government's commitments to end homelessness within the country, by pledging further investment in its £50 million Ending Homelessness Together fund and continuing its welfare reform mitigation with £52.3 million to make sure no-one pays the ‘bedroom tax’.

Scotland’s transition to a rapid rehousing approach is a key part of the strategy to end homelessness. Local authorities are to submit their Rapid Rehousing Transition Plans to the Scottish Government by 31 December 2018 to show their intent in doing this. The development of these plans is being supported by £2 million of funding from the Scottish Government.

Housing investments

The innovative use of government guarantees, loans, grant recycling and new sources of private funding is supporting the delivery of up to 8,500 homes across all tenures and generating over £1 billion of housing investment in addition to conventional funding routes. This includes the successful delivery of the Mid-Market Rent Invitation which will deliver 1,000 mid-market rent homes by March 2021 through a long-term £47.5 million Scottish Government loan and £90 million of Institutional Investment. 

The Scottish Government will continue its investment in Charitable Bonds, worth almost £95 million, providing development finance for around 1,000 affordable homes and generated around £22 million in additional grant for charities which has supported the development of over 200 social rent homes.

The budget also mentioned the delivery of a generous business rate relief package which will ensure more than 90 per cent of properties in Scotland will be charged a lower tax rate than other parts of the UK.

Read the budget