Recent uplifts to affordable housing benchmarks are welcome. They arrive against the backdrop of a declared national housing emergency recognised by the Scottish Parliament in May 2024 and by fourteen local authorities across Scotland which has placed the pace and cost of affordable housing delivery under intense scrutiny. However, the uplifts do not eliminate the viability gap facing registered social landlords, councils and affordable housing developers, and that has important consequences for how schemes are appraised, funded and delivered.
What are Affordable Housing Benchmarks?
The Scottish Government has allocated £925,870 million to the Affordable Housing Supply Programme (AHSP) for 2026/27. Of that, council areas across Scotland are to share £702,470 million in grant funding to support delivery. This funding remains central to the delivery of new affordable homes across Scotland, and to the Scottish Government's target of delivering 110,000 affordable homes by 2032 a commitment which sits at the heart of its response to the housing emergency.
Affordable housing investment benchmarks are used as an administrative tool in grant assessment. They set baseline per-unit funding assumptions, based on a three person equivalent home, across different tenure types and geographies. The applicable benchmark will vary depending on whether the development is led by a registered social landlord or a council, and whether it is located in a remote or rural, other rural, or urban or city area.
In practice, grant funding will be required for most affordable housing schemes to be financially viable. Developers applying for grant assistance must self-certify that the funding requested is the minimum necessary to make the project viable for their organisation while maintaining rent affordability.
The benchmark figures were increased by 16.9% in June 2023 and by 5% in October 2024. Most recently, a further 4.6% increase was introduced in March 2026 across all benchmarks, except for the benchmark relating to zero direct emissions heating systems, which was increased by approximately 24.7%. Projects which can be delivered at or below the relevant benchmark benefit from a more streamlined grant assessment route. By contrast, applications seeking grant above benchmark require additional supporting information and are subject to a more detailed value for money assessment. That distinction matters in practice because it can affect both the evidence burden and the timescale for approval. The Scottish Government reported that, in 2023/24 excluding Glasgow, 56% of 136 approved projects were approved above benchmark.
Why the increases still do not close the gap
The benchmark uplifts improve the position, but they do not remove the underlying viability challenge. For example, the March 2026 baseline benchmarks for registered social landlord social rent range from £100,145 per home in urban areas to £122,614 per home in remote or rural areas. Those figures are helpful for grant assessment purposes, but they do not necessarily reflect full development cost in a market affected by construction inflation, abnormal site conditions, infrastructure requirements and ongoing supply chain pressures.
Affordable housing providers also face standards and delivery requirements that can add materially to cost. These include compliance with the Scottish Housing Quality Standard, energy and sustainability requirements, and design and space standards that may exceed those applicable to mainstream market housing. Site specific abnormal costs, utility and infrastructure works, and programme delays can widen the gap still further. Although the Scottish Government provides additional quality measure benchmarks for matters such as energy performance, ventilation, overheating risk, electric vehicle charge points and zero direct emissions heating systems, many providers will still need to bridge a significant funding shortfall.
What housing providers should be thinking about
For housing professionals, the key point is that benchmark increases are positive, but they do not remove the need for careful scheme appraisal and robust evidence in support of funding requests. Registered social landlords, councils and developers will still need to consider scheme viability at an early stage, test assumptions around abnormal and infrastructure costs, and be prepared for greater scrutiny where grant is sought above benchmark. The context of the national housing emergency adds further urgency to this: the Scottish Government's Housing Emergency Action Plan commits to increasing affordable housing supply, but the pace of delivery depends on individual schemes being financially viable and efficiently appraised. Benchmark movements are therefore helpful, but they are not a complete answer to the pressures the sector is navigating.
You can find the full details of the updated baseline benchmark figures here. If you would like to discuss how these developments affect your housing projects, whether in relation to transactions, development, planning, procurement or regulatory compliance, please do not hesitate to get in touch with our team.
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