The Development Value for Money (DVfM) 2024/25 Annual Report, published by Scotland’s Housing Network, offers a detailed picture of affordable housing delivery across Scotland. Covering 52 projects completed by 21 landlords, the analysis reflects on costs, funding, quality, and timescales from developments that together provided 1,505 new homes. While there is clear evidence of progress, the findings also highlight the scale of the challenges the sector continues to face.
Social rent accounted for 94% of all homes built, underlining the sector’s core mission. At the same time, the mix of housing types is changing. The proportion of one-bedroom homes has dropped significantly, while three- and four-bedroom houses are on the rise, reflecting increasing demand from families. There was also a noticeable shift in property type, with fewer flats and maisonettes and more semi-detached houses and cottage flats being built.
Rural development has grown substantially. In 2024/25, almost 470 homes were delivered in rural areas, nearly double the previous year’s total. This signals important progress in tackling rural housing need, but it also raises new challenges around cost, logistics, and access to labour.
Costs are rising across the board. The average gross cost per home reached £207,387, an increase of more than 5% on the previous year, with works costs making up over 85% of spend. Location, rurality, and levels of specialist provision all continue to influence these figures. While land acquisition costs have reduced, inflationary pressures in construction remain a major driver of rising costs.
All projects reported in the DVfM study were underpinned by funding from the Scottish Government’s Affordable Housing Supply Programme (AHSP). This remains the backbone of affordable housing delivery, but the report also highlights the growing reliance on other sources:
- Housing associations relied heavily on private finance, making up around 40% of their funding mix.
- Local authorities drew significantly on Housing Revenue Account reserves, accounting for 38% of their funding.
- In nine projects, HRA contributions exceeded 50%, with two projects relying on them for more than 70% of total costs.
Quality standards across the sector remain encouraging. Almost every home delivered met Housing for Varying Needs standards, with a strong emphasis on accessibility. Energy performance was also positive, with every project achieving EPC Band B or higher in line with national requirements. However, there is still room for improvement as no projects achieved the Gold Greener Homes standard, and 42% of projects fell short of the higher levels of Secured by Design accreditation.
Project timescales showed signs of recovery from the disruption of the pandemic. Nearly three-quarters of projects were completed within 22 months, a marked improvement on previous years. Nonetheless, delays persist, particularly in rural areas, and external pressures such as labour shortages, supply chain issues, and rising material costs continue to affect delivery.
The DVfM findings underline both the strengths and weaknesses of current delivery. The sector has shown resilience, continuing to provide good-quality, energy-efficient homes at scale despite rising costs and funding pressures. Yet, challenges remain. Greater efficiency in procurement and project management will be required to keep costs under control. More ambitious sustainability targets must be pursued if Scotland is to meet its climate commitments. And there is an ongoing need to deliver a better mix of homes – larger family homes and specialist provision – that truly match community needs.
At Highlight Housing, we see our role as helping partners respond to these challenges. We work with housing associations, local authorities, and housebuilders to:
- Strengthen governance, compliance, and performance frameworks.
- Provide sales and marketing strategies that accelerate delivery and reduce development risk.
- Use data and community insight to ensure homes meet the real needs of people and places.
The findings of this report confirm that collaboration and innovation will be essential to maintaining progress. Scotland’s housing sector is delivering, but it is under pressure. Rising costs, increasing reliance on government and private funding, and the demand for more ambitious quality standards all mean landlords need more support than ever.
By working together, sharing best practice, and focusing on value for money, we can continue to build the affordable, sustainable homes Scotland needs.
You can read the report by clicking here