Scope of the AHSP
The AHSP aims to deliver a mix of social housing and other affordable housing, which are defined as follows:
- Affordable housing within the context of the AHSP includes both social and Mid market rented homes, and also low cost home ownership properties.
- Social housing is rented housing let by councils and registered social landlords, normally with a Scottish Secure Tenancy Agreement.
In 2020-21 investment through the AHSP was made up of a variety of different grant mechanisms and loan and equity funding. The following provides a summary of the types of support given in 2020-21.
Grant to Housing Associations
Grant is available to registered social landlords (RSLs) to acquire land or buildings and to build, convert or improve housing for social rent, or their subsidiaries for Mid market rent or low-cost home ownership. RSLs are registered with and regulated by the Scottish Housing Regulator (SHR).
Support to Mid market rent (MMR)
Mid market rent properties are aimed at assisting people on low and modest incomes to access affordable rented accommodation. This housing option is targeted at people on incomes that are not enough to afford owner occupation but who can afford to pay more than a social rent. In 2020-21 they were mainly provided by RSL subsidiaries. In exchange for the financial support from Scottish Government, the landlord accepts restrictions on the rents that they can charge. Mid market rent is supported by the Scottish Government through grant funding as well as innovative initiatives including loan finance and financial guarantees.
Council House Delivery
Grant is available to support local authorities to deliver more council homes.
LIFT brings together ways to help households access homeownership. The LIFT shared equity schemes in operation were New Supply Shared Equity (NSSE) and the Open Market Shared Equity Scheme (OMSE)
- Under the New Supply Shared Equity scheme, the Scottish Government gives grants to registered social landlords to help them build or buy new homes for sale and provide them on a shared equity basis to people on low to moderate incomes. Buyers fund 60 to 80 per cent of the purchase price and the Scottish Government holds the remaining share under a shared equity agreement.
- The Open Market Shared Equity scheme helps eligible buyers on low to moderate incomes to buy a home that is for sale on the open market. It is administered through an agent on behalf of the Scottish Government. Purchasers fund 60 to 90 per cent of the purchase price and the Scottish Government holds the remaining share under a shared equity agreement
Partnership Support for Regeneration (PSR) – (former Grant for Rent and Owner Occupation (GRO) Grants)
These are grants to private developers to build houses for sale. They are used to introduce housing for sale in areas with little or no private housing and to help meet local shortages.
Grant is only considered where projects meet the local strategic investment objectives of the area and are consistent with the Local Housing Strategy of the local authority where development is proposed.
Home Owners’ Support Fund (HOSF)
The Mortgage to Rent scheme and the Mortgage to Shared Equity scheme make up the Home Owners' Support Fund, which helps home owners at the lower end of the market who are experiencing difficulty in paying any loans that are secured against their property. The Mortgage to Rent scheme enables home owners to remain in their home by selling it to a social landlord - such as a housing association or local authority – and allowing them to continue to live there as a tenant. The Mortgage to Shared Equity scheme involves the Scottish Government taking a temporary equity stake in the property. This reduces the amount to be paid by the owner to the lender every month.
Town Centre Empty Homes Fund (TCEHF)
A former fund to create affordable homes for sale and rent by converting disused commercial premises. It also targeted long-term empty homes needing renovation to make them habitable.
Rural and Islands Housing Fund (RIHF)
Launched in 2016 with the primary aim of increasing the supply of long term affordable housing of all tenures in rural and islands areas. The fund is open to a wide range of potential applicants, including those not able to access traditional funding streams such as community bodies, rural landowners, landlords and private developers. It enables them to take a more active role in meeting the housing needs of their community.
HIF funds housing infrastructure where projects have stalled or can’t proceed due to the level or cost of infrastructure. With the launch of the Housing to 2040 Strategy, we have set out a clear case for “infrastructure first” investment to support long-term housing development, focused on strong place-based investment approaches.
To support these aims, Scottish Ministers have approved the continuation of HIF grant funding with an anticipated further 5 year funding allocation. The continuation of HIF provides an opportunity to build on the successes and lessons learned to date and ensure there remains infrastructure support to unlock housing and deliver on the core aims of Housing to 2040.
Innovative funding solutions such as government guarantees, loans and grant recycling are supporting our ambitions to create communities that are inclusive, empowered, resilient and safe, while expanding the delivery of more homes across all tenures.
We continue to collaborate across the public and private sectors, working with local authorities and delivery partners to maximise available public resources in order to harness increased levels of private finance in innovative ways.
A number of other projects have contributed to the continued expansion of affordable housing supply through Mid market rent (MMR) across Scotland including LAR Housing Trust and the MMR Invitation.
Local Affordable Rented (LAR) Housing Trust – a Scottish charity supported by a package of SG loan funding and Institutional Investment, and set up to provide MMR homes across Scotland.
Mid market rent Invitation – Places for People (PfP) Capital were selected as the preferred bidder and are supported by a package of SG loan funding and pension fund investment to provide MMR homes across Scotland.
Charitable Bond - The Charitable Bond model is an innovative funding mechanism which provides loan finance for affordable housing, while also generating capital funds, in the form of Charitable Donations. In some instances the donations formed the sole subsidy contribution from the Scottish Government towards the development of social housing but in other cases they were donated in addition to grant funding through the AHSP.
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