Housing statistics quarterly update: June 2020

3. Affordable Housing Supply

Affordable Housing Supply Programme statistics reflect the broader supply of affordable homes (i.e. for social rent, affordable rent and affordable home ownership) and include off the shelf purchases and rehabilitations as well as new builds. Statistics are available up to the end of March 2020.

Quarterly affordable housing supply statistics are used to inform the Scottish Government target to deliver 50,000 affordable homes, including 35,000 homes for social rent, over the period 2016/17 to 2020/21, and reflect the number of affordable homes delivered that have received some form of government support through loans, grant or guarantees.

Approvals, starts and completions are all measured for the Affordable Housing Supply Programme. Approval is the point at which funding is granted. Starts are recorded when site clearance begins, or any point up to the beginning of ground works for foundations. Completion measures when the units are delivered and ready for occupation.

Social Rent includes Housing Association Rent, Council House Rent as well as Home Owner Support Fund Rent.

Affordable Rent includes Mid-Market Rent (MMR), National Housing Trust (NHT) Rent as well as other programmes such as the Empty Homes Loan Fund (EHLF) and Rural Homes for Rent (RHfR).

Affordable Home Ownership includes Open Market Shared Equity (OMSE), New Supply Shared Equity (NSSE), Shared Ownership (LCHO) as well as other programmes such as Home Owner Support Fund Shared Equity.

Summary Table – Affordable Housing Supply to March 2020

	Approvals	Starts	Completions
Quarter Jan to Mar 2016	3,708	2,783	2,153
Quarter Jan to Mar 2017	5,032	3,705	2,245
Quarter Jan to Mar 2018	6,428	3,206	3,374
Quarter Jan to Mar 2019	5,013	3,693	3,698
Quarter Jan to Mar 2020	6,069	4,766	3,483
Change over latest year	+1,056	+1,073	-215
Change (%) over latest year	+21%	+29%	-6%
Year to Mar 2016	7,945	7,682	6,518
Year to Mar 2017	10,276	9,308	7,359
Year to Mar 2018	11,677	10,569	8,578
Year to Mar 2019	11,130	10,872	9,568
Year to Mar 2020	12,866	12,045	9,286
Change over latest year	+1,736	+1,173	-282
Change (%) over latest year	+16%	+11%	-3%

Chart 1, along with the Summary Table above, show that a total of 6,069 affordable homes were approved in the quarter January to March 2020. This is 1,056 (21%) more than in the same quarter in the previous year and 64% higher than the 3,708 approvals in the same quarter in 2016. It brings the total for the year to end March 2020 to 12,886 approvals, up 16% (1,736 homes) on the previous year, and an increase of 62% compared to year end March 2016.

Between January and March 2020, there were 4,766 affordable homes started, a 29% increase, or 1,073 more homes than the same quarter last year, and an increase of 71% on the same quarter in 2016. This brings the total for the year to end March 2020 to 12,045, up 11% (1,173 homes) on the 10,872 starts in the previous year, an increase of 57% when compared to year end March 2016.

A total of 3,483 affordable homes were completed in the quarter January to March 2020, an decrease of 6%, or 215 homes, when compared to the equivalent quarter in the previous year, but 62% more than in the same quarter in 2016. This brings the total for the year to end March 2020 to 9,286, down 3% (282 homes) on the 9,568 completions in the previous year, but an increase of 42% on the 6,518 homes delivered in the year to March 2016.

It should be noted that the amount of affordable housing supply activity recorded in the most recent quarter January to March 2020 will have been impacted by the introduction of government advice and measures to reduce the spread of the coronavirus (COVID-19) from mid-March onwards, in which non-essential construction activity stopped, and home buyers were advised to delay moving to a new home where possible.

This has lowered the total amount of activity recorded for this quarter compared to what would otherwise have been the case. Year to date totals to end March 2020 will also have been affected.

Figures for the next quarter April to June 2020, which are due to be reported on in the quarterly housing statistics update in September 2020, are likely to see an even greater impact due to COVID measures continuing throughout April and May, and into June 2020.

Chart 2 shows that total affordable housing supply programme approvals increased by 16% between 2019 and 2020 (years to end March). In the latest year 2020, social rent approvals accounted for 78% of all approvals, with affordable rent and affordable home ownership both making up 11% of the total each.

In the year end to March 2020, there were 10,057 homes approved for social rent, 32% (2,446 homes) more than the same period in 2019. There were 1,397 approvals for affordable rent, 9% (120 homes) more than the same period in 2019. 1,432 homes were approved for affordable home ownership in the year to end March 2020, 36% less (810 homes) than the previous year.

Chart 3 illustrates that total affordable housing supply programme starts increased by 11% between 2019 and 2020 (years to end March). In the latest year, social rent starts accounted for 73% of all starts, with affordable rent and affordable home ownership making up 16% and 11% of the total, respectively.

In the year to end March 2020, there were 8,782 starts for social rent, 26% more (1,810 homes) than the previous year. There were 1,962 homes started for affordable rent in the year to end March 2020, 26% more (399 homes) than the same period in 2019. In the year to end March 2020, 1,301 homes were started for affordable home ownership, 44% (1,036 homes) less than in the previous year.

Chart 4 shows that total affordable housing supply programme completions decreased by 3% between 2019 and 2020 (years to end March). In the latest year, social rent completions accounted for 75% of all completions, with affordable rent and affordable home ownership making up 10% and 15% of the total, respectively.

In the year to end March 2020, there were 6,952 homes competed for social rent, 5% (358 homes) more than the previous year. There were 967 affordable rent homes completed in the year to end March 2020, 1% less (10 homes) than in 2019. 1,367 homes were completed for affordable home ownership in the year to end March 2020, 32% (630 homes) less than in 2019.

Comparison with the rest of the UK from 2007/08 to 2018/19

This section compares how the level of affordable housing supply per head of population varies between Scotland and other UK countries, to help meet user demand for cross country analysis.

Each of the countries of the UK produces their own statistics on affordable housing supply^[1]. Whilst there are some differences in the detail of affordable housing definitions and products used by each country, some comparisons can be made on how affordable housing supply varies per head of population.

Chart 5 below illustrates how the figures per 10,000 population have varied across the 2007/08 to 2018/19 period.

Between 2007/08 and 2018/19, the annual average supply of affordable housing per head of population in Scotland has been 13.4 homes per 10,000 population, higher than England (9.5 homes per 10,000 population), Wales (7.6 homes per 10,000 population), and Northern Ireland (10.2 homes per 10,000 population). In 2018/19 the figures were 17.5 homes per 10,000 population in Scotland, 10.2 in England, 8.2 in Wales, and 11.1 in Northern Ireland.

In 2019/20 the rate in Scotland was 17.0. Affordable housing supply figures for England, Wales and Northern Ireland for 2019/20 are not yet available, but will be added to this chart in future publications once these are released.

Note that statistics for England and Wales both include developer-funded Section 106 supply, although for England it is thought that some will be missed as local authorities are not aware of it all. Northern Ireland does not currently have an equivalent mechanism. Data for Scotland include Section 75 units receiving some form of government funding. Data are not available to estimate the number of affordable homes delivered without central government funding in Scotland, but it is thought that the numbers of these homes may be relatively low based on current estimates of the number of funded Affordable and Section 75 homes being delivered.

In addition to the differences in total affordable supply between each country, there are also some differences in the use of different affordable housing products within the mix of overall affordable housing in each country. For example in England in recent years there has been a greater use of affordable / intermediate rent compared to social rent. Therefore when looking over the four years to 2018/19, in England there have been on average 4.6 affordable / intermediate rent homes completed per 10,000 head of population and 1.1 social rented homes completed 10,000 per-head of population. This compares to a rate of 1.8 for affordable rent homes and a rate of 9.3 for social rented homes in Scotland.