The Scottish Federation of Housing Associations (SFHA) said the Budget represents “some progress” but does not go far enough to ensure everyone in Scotland has a safe, warm and affordable home. It called on the Scottish Government to protect and strengthen housing investment ahead of its own Budget in December.

The Budget introduces a zero rate of VAT on land sold to registered social housing providers from April 2027. The Government also set out plans to improve local authorities’ capacity to deliver housing, release public land for affordable homes and simplify development processes.

SFHA chief executive Richard Meade welcomed the Chancellor’s introduction of zero-rate VAT should “reduce barriers, lower some development costs and help deliver the social and affordable homes Scotland needs”.

He said the UK Government’s extra investment in social and affordable housing, and its plan to end rough sleeping in England, set “an ambition that should be matched in Scotland”. But he warned that short-term energy help cannot replace lasting reform, and called for a social energy tariff. He also criticised the Budget for failing to address the LHA freeze or the five-week wait for Universal Credit.

“With Scotland’s capital budget already under significant pressure, housing cannot be expected to absorb wider reductions,” Mr Meade said.

Shelter Scotland’s interim director, Gordon Llewellyn-MacRae, said the Prime Minister was right to make homelessness his priority on day one, but that the Budget “doesn’t go far enough to address the housing emergency”. The Prime Minister announced an extra £430 million to tackle rough sleeping in England, taking total funding to £874m through to the end of this Parliament.

He pointed out that the UK Government has kept the bedroom tax and benefit cap, which the Scottish Government spends millions of pounds every year to effectively eradicate in Scotland. It has also kept LHA frozen and retained Home Office policies that, he said, cause homelessness “by design”. He urged Scottish ministers to use any additional funding from the Chancellor’s investment plans to reduce homelessness, uphold housing rights and deliver social homes.

Fellow charity Cyrenians welcomed the UK Government’s ambition on rough sleeping but said the funding is focused on the “crisis end” of homelessness.

The announcement came a day after Scottish Government figures showed the strain on the country’s housing system. Last year, 8% fewer new homes were added to the housing stock and councils let 14% fewer homes, while the number of households in temporary accommodation reached a record high.

Cyrenians CEO Kate Wallace said: “The surest way to end rough sleeping is to stop people reaching that point in the first place.” She said the LHA freeze, together with the bedroom tax, costs the Scottish Government tens of millions of pounds to mitigate, money that could fund prevention.

“We can’t build our way out of this crisis. We have to prevent it,” she said, adding that rolling out prevention duties nationally will need “sustained, multi-year investment”.

Homeless Network Scotland said any additional Barnett funding arising from homelessness initiatives in England should be ringfenced by the Scottish Government. Head of Policy and Impact Matt Hamill urged the UK Government to provide full details of any Barnett consequentials as soon as possible, ahead of the Scottish Budget.

He noted that in opposition, John Healey had described the bedroom tax as “callous, reckless and heartless”, yet as Chancellor “has chosen to leave it in place”.

First Time Buyer ISA

A new First Time Buyer ISA will be introduced from April 2029, and can be held in cash or invested in stocks and shares. Savers can contribute up to £4,000 per tax year. When funds are withdrawn on exchange, the government will add a 25% bonus on the final balance, up to a maximum of £20,000. It can be used to buy a property worth up to £450,000. The Government has also changed the Lifetime ISA withdrawal penalty for those who buy above the price limit.

Separately, Fraser Carr of Cala Homes said the “Your First Home” scheme, aimed at first-time buyers in England, could help more people onto the ladder by cutting the minimum deposit to 2.5% alongside a 20% government-backed equity loan. He urged buyers to consider “the bigger financial picture” beyond the deposit.

Support with energy costs

Households in Council Tax bands A to D in England will receive a £100 energy payment this winter, under a £2.6 billion scheme. The Scottish, Welsh and Northern Ireland governments will receive a share of the funding. The VAT cut on electricity will be extended to July, standing charges will be removed from household gas bills (offset by higher gas unit rates), and a one-off targeted energy debt relief scheme will launch next year.

Citizens Advice Scotland said the Budget “will not save people from another winter of unaffordable energy bills”. Director of Impact David Hilferty said the new payment “amounts to a fraction of the rise to bills this year alone”, and called for an affordable social tariff, an energy debt write-off scheme and the unfreezing of LHA.

Consumer Scotland welcomed the energy debt relief commitment but warned that raising the gas unit rate means some households with high essential energy needs, including disabled people and the terminally ill, could pay more. Chief Executive Sam Ghibaldan said the Scottish Government has committed to ensuring Scottish households also benefit from the £100 payment.

The Joseph Rowntree Foundation said the measures are a step in the right direction but are “another temporary intervention”. Group CEO Julian Hartley urged the Prime Minister, Andy Burnham, to restore the link between LHA and local rents, introduce a protected minimum floor in Universal Credit and create an Affordable Energy Guarantee.

Generation Rent’s Holly Williamson welcomed the payment as “a lifeline for millions of renters” but called the LHA freeze “hugely disappointing”. LHA has been frozen since April 2024, and private rents have since risen by over 23%, according to the Resolution Foundation, leaving just 2.7% of advertised lets in Britain affordable to people claiming housing benefit.

British Gas Energy Trust welcomed the action on standing charges and debt, noting that energy debt now stands at over £5 billion. Age Scotland said the measures offer “some breathing space” but the Budget “feels piecemeal”. It asked the Scottish Government to match the £100 payment and extend it to everyone receiving Pension Credit, whatever their council tax band.