Affordable Housing Supply Programme: Affordable housing 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 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 for the project 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 was subsequently increased by 16.9% in June 2023 and by 5% in October 2024. Additional quality measure benchmarks were also introduced in June 2023 and October 2024 to account for (a) the installation of electric vehicle charge points and  (b) updated provisions for energy performance, ventilation and assessment of overheating risk which were introduced through building regulations in February 2023. A further 4.6% increase across all benchmarks was introduced in March 2026 (with the exception of the benchmark relating to the installation of zero direct emissions heating systems which was subject to an increase of approximately 24.7%).