Affordable housing investment benchmarks published

The main changes between this guidance note and MHDGN 2022/02 are as follows: 

• an uprated set of affordable housing investment benchmarks is reflected in this guidance note, alongside illustrative examples showing how these work in practice – these benchmarks are 16.9% higher than the previous set (this percentage increase reflects the Scottish Social Housing Tender Price Index for the year to December 2022) 
• an additional 'quality measure’ benchmark for the installation of electric vehicle charge points has been introduced 

• the quality standards that would require to be met when purchasing ‘second-hand’ residential dwellings with vacant possession have been included 
• RSL social rent benchmark assumptions are reintroduced for grant assessment purposes, and 
• information is provided on the Scottish Government’s Heat Network Fund. 

In line with the former Cabinet Secretary for Social Justice, Housing & Local Government’s letter of 21 February 2023, grant applicants which intend to apply for grant funding through the Affordable Housing Supply Programme from 1 December are reminded that homes within new build and conversion projects will require to contain zero direct emissions heating systems (unless there are compelling reasons why this would not be considered appropriate, or where a valid building warrant application has been submitted prior to that date). 

Sally Thomas, SFHA Chief Executive, said

“SFHA represented the national sector in the 2021 Affordable Housing Investment Benchmarks Working Group, and proposed a new system in which benchmark assumptions should be reviewed annually in line with costs. This new approach has led to a 16.9% uplift in this year’s affordable housing investment benchmarks, which reflects the increases our members have reported in construction costs, with the average cost of building a home now above £200,000. We must bear in mind that these benchmarks are guides rather than limits on funding for new affordable homes, and in particular members in rural areas or who are required to meet specific local design standards may well experience higher costs. However, we welcome the updated benchmarks and will now explore their likely impact with our members.”