Affordable Housing Supply Programme: process and procedures MHDGN 2022/02

Tenure, built form and quality standards

Tenure

The grant funding which is available through the Affordable Housing Supply Programme primarily supports the delivery of social rented housing, homes for mid-market rent, and the provision of housing for low cost home ownership (most notably the new supply shared equity scheme)[1]:

• Homes for social rent are let under a Scottish Secure Tenancy or a Short Scottish Secure Tenancy[2].  While the majority of social rented homes that are delivered through the Affordable Housing Supply Programme will be let under a Scottish Secure Tenancy, discussions should be held between the grant applicant and the grant provider where this form of tenancy is not proposed.
• Homes for mid-market rent are let under a Private Residential Tenancy.
• New supply shared equity homes are homes which are for sale on a shared equity basis and which are (a) built by local authorities or RSLs (b) purchased by local authorities or RSLs at an appropriate discount from private developers or (c) developed by local authorities or RSLs for existing owner occupiers whose homes are scheduled for demolition and who wish to participate in an agreed area redevelopment plan.

Built form 

It is expected that the majority of homes delivered through the Affordable Housing Supply Programme over the period up to 2026-27[3] will be new build units that are delivered directly by grant applicants or through new build ‘off the shelf’ purchases from developers.

However, the Affordable Housing Supply Programme can also support the purchase of individual ‘second-hand’ residential dwellings under certain circumstances (see below), as well as the refurbishment of existing residential properties and the conversion of non-residential property where these projects are considered a strategic priority.

Where it can be demonstrated that the purchase of individual ‘second-hand’ residential dwellings meets a clear strategic purpose and can be clearly seen to support the achievement of the priorities and objectives set out in the relevant local authority’s Local Housing Strategy, the Affordable Housing Supply Programme can support this under the following scenarios[4]:

• the dwelling is for sale on the open market and will be purchased with vacant possession (unless otherwise agreed with the Scottish Ministers)
• the dwelling is not for sale on the open market but will be purchased with vacant possession – securing stock where there is a limited supply and limited development opportunities, and/ or securing stock for households with specialist requirements, are examples of the type of situation where this might be deemed appropriate, and
• the dwelling is not for sale on the open market and the owner occupier (a) cannot afford the required maintenance or refurbishment of their home (particularly where this is in a mixed tenure block) and (b) would therefore wish to sell their home and remain in it as a tenant in the social rented sector[5].  Under this scenario, the value of the property must be in line with the terms of the Mortgage to Rent scheme, and the amount of money that the household can retain post sale must mirror the terms of the Mortgage to Rent scheme (with any capital and equity in excess of the limits set for this scheme requiring to be forwarded to the Scottish Government and used to support the Affordable Housing Supply Programme).  It would also need to be clearly demonstrated that:
• the purchase facilitates the consolidation of stock ownership for managing specific planned stock improvement/ refurbishment works
• the local authority is unable to facilitate the planned works from local resources under discretionary power to assist
• the owner occupier has received (a) advice about their financial situation from an FCA authorised independent financial adviser and (b) independent legal advice on the terms of the proposed sale and subsequent tenancy agreement
• the owner occupier will employ a solicitor to act on their behalf with respect to the sale of their home, and
• the owner occupier is not eligible for support under the Home Owners’ Support Fund.

Quality standards

New build homes delivered directly by grant applicants (excluding the purchase of ‘off the shelf’ new build stock from developers)

New build homes which are delivered directly by grant applicants should:

• as a minimum, be two person, two apartment units (unless otherwise agreed with the relevant Scottish Government area team and local authority)
• comply with all applicable building regulations as required by law
• meet, as a minimum, the design criteria indicated as a ‘basic’ requirement as outlined in Housing for Varying Needs (column ‘B’ in ‘Summary of Design Criteria’) – the design criteria indicated as ‘desirable’ (column ‘D’ in ‘Summary of Design Criteria’) should also be included where possible
• include ducting to help future-proof access to internet and broadband services, wherever possible[6]
• have space for home working or study[7]
• have private or communal outdoor space with room for people to sit outside, and
• be digitally-enabled – when a household gets the keys to their home they must be able to arrange for an internet connection to ‘go live’ without the internet service provider having to provide additional cabling to the premises.  These connections should utilise the best available technology and, where it is not possible for a gigabit capable technology to be provided immediately, the physical infrastructure should be installed to support retrospective deployment.

While it is acknowledged and accepted that not all projects which are under development will contain the measures set out in bullet points five to seven above, grant applicants should ensure that these measures are incorporated into future development proposals as quickly as is practicable.

‘Off the shelf’ purchases of new build stock from developers

‘Off the shelf’ purchases of new build stock from developers should:

• as a minimum, be two person, two apartment units (unless otherwise agreed with the relevant Scottish Government area team and local authority)
• comply with all applicable building regulations as required by law
• aim to meet, as a minimum, the design criteria indicated as a ‘basic’ requirement as outlined in Housing for Varying Needs (column ‘B’ in ‘Summary of Design Criteria’) – the design criteria indicated as ‘desirable’ (column ‘D’ in ‘Summary of Design Criteria’) should also be included where possible 
• include ducting to help future-proof access to internet and broadband services, wherever possible (see footnote 6)

• have space for home working or study (see footnote 7)
• have private or communal outdoor space with room for people to sit outside, and

• be digitally-enabled – when a household gets the keys to their home they must be able to arrange for an internet connection to ‘go live’ without the internet service provider having to provide additional cabling to the premises.  These connections should utilise the best available technology and, where it is not possible for a gigabit capable technology to be provided immediately, the physical infrastructure should be installed to support retrospective deployment.

While it is acknowledged and accepted that not all projects which are under development will contain the measures set out in bullet points five to seven above, grant applicants should ensure that these measures are incorporated into future development proposals as quickly as is practicable.   

Projects comprising the refurbishment of existing residential properties

Projects comprising existing residential properties (not new build) should:

• as a minimum, be two person, two apartment units (unless otherwise agreed with the relevant Scottish Government area team and local authority)
• comply with all applicable building regulations as required by law
• maximise energy efficiency and accessibility, as far as is practicable – evidence of this should be provided when applying for tender approval through the HARP system
• include ducting to help future-proof access to internet and broadband services, wherever possible (see footnote 8)
• have space for home working or study (see footnote 9)
• have private or communal outdoor space with room for people to sit outside (unless there are compelling reasons why this space cannot be provided), and
• be digitally-enabled – when a household gets the keys to their home they must be able to arrange for an internet connection to ‘go live’ without the internet service provider having to provide additional cabling to the premises.  These connections should utilise the best available technology and, where it is not possible for a gigabit capable technology to be provided immediately, the physical infrastructure should be installed to support retrospective deployment. 

While it is acknowledged and accepted that not all projects which are under development will contain the measures set out in bullet points five to seven above, grant applicants should ensure that these measures are incorporated into future development proposals as quickly as is practicable.

Projects comprising the conversion of non-residential property into housing

Projects comprising the conversion of non-residential properties (not new build) should:

• as a minimum, be two person, two apartment units (unless otherwise agreed with the relevant Scottish Government area team and local authority)
• comply with all applicable building regulations as required by law
• maximise energy efficiency and accessibility, as far as is practicable – evidence of this should be provided when applying for tender approval through the HARP system
• include ducting to help future-proof access to internet and broadband services, wherever possible (see footnote 8)
• have space for home working or study (see footnote 9)
• have private or communal outdoor space with room for people to sit outside (unless there are compelling reasons why this space cannot be provided), and
• be digitally-enabled – when a household gets the keys to their home they must be able to arrange for an internet connection to ‘go live’ without the internet service provider having to provide additional cabling to the premises.  These connections should utilise the best available technology and, where it is not possible for a gigabit capable technology to be provided immediately, the physical infrastructure should be installed to support retrospective deployment. 

While it is acknowledged and accepted that not all projects which are under development will contain the measures set out in bullet points five to seven above, grant applicants should ensure that these measures are incorporated into future development proposals as quickly as is practicable.

Liveable places and sustainable communities

It is important that quality homes are provided in the right places, where people want to live, and that these are well connected to services, facilities, sustainable transport and green spaces for play and recreation.

Communities’ health, wellbeing and resilience, their sense of identity and the sustainability of the environment and the planet, are influenced by the quality of housing and the quality of place.

Projects funded through the Affordable Housing Supply Programme should therefore be well-designed and delivered with reference to the following:

• the Scottish Government’s planning, design and placemaking policies included in Scottish Planning Policy and architecture policies, namely Creating Places and Designing Streets policy statements, and

• Water-resilient places - surface water management and blue-green infrastructure: policy framework (which sets out the important role of blue and green infrastructure, including how rainwater will be managed without connecting to the public sewer network), and Nature Scot’s[8] report on maximising the benefits of green infrastructure in social housing.   

Adopting a holistic place-based approach on projects can help to ensure that these issues and more are considered locally, and that appropriate local solutions and consensus are achieved.  Therefore, projects should also be delivered with reference to the Place Standard tool[9], which is designed to support holistic conversations on, and considerations of, quality of place and the relationship to quality of life.