Affordable Housing Supply Programme: investment benchmarks

Introduction

When applying for grant assistance at tender stage to deliver homes for social rent and mid-market rent, local authorities and registered social landlords are required to self-certify that the amount of funding that they are requesting is the minimum required for a project to be financially viable for their organisation whilst ensuring rent affordability.

For new build, refurbishment and conversion projects, the amount of grant requested is then compared with the applicable affordable housing investment benchmark to determine how the funding application will be assessed.

Projects that can be delivered with grant funding at or below the relevant benchmark follow a streamlined assessment process, with projects which are seeking grant funding above the relevant benchmark following a more detailed value for money assessment. The benchmark system is therefore a flexible, administrative tool which is used for grant assessment purposes only – rather than being a grant rate or grant ceiling.

A review of affordable housing investment benchmarks was undertaken between March and June 2021. The review was carried out by a cross-sector working group and was jointly chaired by the Scottish Government and COSLA. Following consideration of the final report on the work of the group, the former Cabinet Secretary for Social Justice, Housing and Local Government advised the working group of her decision on the outcome.

The revised set of affordable housing investment benchmarks set out in the former Cabinet Secretary for Social Justice, Housing and Local Government’s communication to the working group were subsequently increased by 16.9% in June 2023, with a further increase of 5% being introduced in October 2024. An additional quality measure benchmark was also introduced in October 2024 to account for updated provisions for energy performance, ventilation and assessment of overheating risk which were introduced through building regulations in February 2023.