Policy landscape for housing co‑ops ‘confused and inconsistent’, FOI reveals

Jasmine Owens reports that, although ministers publicly state their support for co‑operative housing, internal correspondence and campaigners’ experiences suggest that officials often lack a clear understanding of how co‑ops operate. This, she says, has left non‑profit housing co‑ops feeling overlooked despite years of engagement attempts.

While registered social landlord (RSL) co‑ops receive government funding and exemptions, non‑RSL co‑ops continue to face significant financial barriers. Campaigners argue that targeted relief could help establish more co‑ops and sustain existing ones—an important consideration during Scotland’s ongoing housing crisis.

The issue is particularly acute in student housing. Edinburgh and Glasgow face a combined shortfall of around 20,000 student beds, leaving thousands at risk of homelessness. Yet 106 students currently live affordably at the Edinburgh Student Housing Co‑operative (ESHC), the UK’s largest student housing co‑op.

Resident Emilia Kibble says the co‑op’s £388 monthly rent is only possible because it operates on a non‑profit basis. She adds that the community‑led model also supports wellbeing at a time of rising social isolation.

Despite ESHC’s decade‑long track record, Owens reports that its members have repeatedly sought meetings with the Scottish Government’s housing team without success. Former housing minister Paul McLennan expressed verbal support at parliamentary events, but ESHC members say promised meetings never materialised.

McLennan told Owens he could not recall declining a meeting and said requests were handled by officials.

Glasgow MSP Paul Sweeney, chair of the Cross Party Group on Co‑operatives, told Owens there is resistance within government to adapting policy for small, community‑based co‑ops. He believes ministers remain focused on large‑scale development and sceptical of tenant‑led models.

Efforts to amend recent housing legislation to support co‑ops were unsuccessful. Sweeney argues that Scotland needs a cultural shift to recognise the value of co‑operative housing, particularly as investor‑led student accommodation continues to expand.

Owens obtained internal government emails through freedom of information requests. These showed officials acknowledging in 2025 that they lacked a clear understanding of co‑operative housing, with one describing co‑ops as “a bit of an unknown entity”.

Other emails stated there was “no ‘home’ for co‑ops in the Housing Team” and that co‑ops “do not really have a housing policy home”.

Co‑operatives UK policy officer Tom Laing told Owens that confusion and unclear responsibilities are holding back progress. He said co‑ops could deliver more of the affordable, community‑led housing ministers say they want.

Owens highlights two major financial pressures on non‑RSL co‑ops:

• Additional Dwelling Supplement (ADS)

A 2023 consultation found 83% of respondents supported exempting co‑ops from the 8% ADS charge. The government declined to do so, instead committing to “explore ways” to support co‑ops.

RSL co‑ops are already exempt, but groups like ESHC must still pay the tax. Members argue the ADS was designed to deter second‑home ownership, not penalise people buying their primary residence collectively.

• HMO licensing fees

ESHC says it pays around £30,000 annually in HMO fees. Because HMO exemptions can be set through secondary legislation, campaigners argue the housing minister could act quickly to reduce this burden.

Owens reports that campaigners believe these costs prevent new co‑ops from forming and limit the growth of existing ones.

A Scottish Government spokesperson told Owens: “Co-operatives are a valued part of the social housing sector in Scotland… The government and housing regulator provide a legal, regulatory and financial framework within which housing co-ops can operate and grow in the social rented sector.”

Owens notes that 2025 has seen some positive steps. Co‑operatives UK held a Holyrood reception in January, sponsored by Green MSP Lorna Slater, to promote its Call for a Co‑operative Scotland policy platform. RSL co‑ops and student co‑ops attended.

UK Government ministers Blair McDougall MP and Kirsty McNeill MP also hosted a roundtable at New Lanark to discuss support for co‑ops and mutuals.

The Confederation of Co‑operative Housing will launch its Scottish manifesto in Glasgow on 5 March, and Co‑operatives UK is due to attend a roundtable with the Scottish Housing Regulator later in the month.