
Housing at the Heart of the Scottish Draft Budget 2025/26: Key Observations
The Scottish Government’s draft budget for 2025/26 has placed a strong emphasis on health, social care, and economic growth. While housing may not have been the headline-grabbing focus, it remains central to the success of many of these broader priorities.
Quality housing underpins the nation’s ability to tackle health inequalities, support vulnerable people, and meet ambitious environmental targets. The Scottish Government’s draft budget has placed a strong emphasis on health, social care, and economic growth. While housing may not have been the headline-grabbing focus, it remains central to the success of many of these broader priorities. Quality housing underpins the nation’s ability to tackle health inequalities, support vulnerable people, and meet ambitious environmental targets.
Housing’s Role in Supporting Health and Well-Being
The connection between housing and health cannot be overstated. Poor housing conditions, including damp, cold, and overcrowding, significantly contribute to physical and mental health issues. These conditions are often most pronounced in social housing, where underinvestment in repairs and retrofits can leave residents vulnerable.
The budget’s record funding for the NHS aims to address pressures on the health service, but tackling root causes like inadequate housing is a crucial preventative measure. Safe, warm, and secure homes reduce hospital admissions and long-term care needs. Similarly, investment in social care services relies on the availability of suitable, accessible housing to enable independent living and reduce reliance on overstretched facilities.
Progress and Challenges in Affordable Housing
Scotland’s commitment to delivering 110,000 affordable homes by 2032 reflects the government’s ambition to address the housing crisis. However, despite increased funding, the pace of delivery has struggled to meet the growing demand. Rising construction costs, labour shortages, and competing priorities—such as retrofitting existing homes to meet energy efficiency standards—present significant challenges.
For registered social landlords, the budget allocations must be stretched to meet competing needs:
- Building new homes that are affordable and meet modern standards.
- Retrofitting existing properties to align with net-zero commitments.
- Tackling issues such as damp, mould, and disrepair that affect tenant health.
Smaller housing associations managing a few thousand homes, and larger organisations overseeing tens of thousands, must both find ways to deliver on these demands without compromising quality or affordability.
Opportunities in Sustainability
The budget’s emphasis on decarbonisation presents opportunities for registered social landlords to align with Scotland’s green ambitions. Retrofitting homes with improved insulation, renewable heating systems, and energy-efficient designs is essential to reduce emissions and combat fuel poverty. However, while these measures promise long-term benefits, the upfront costs remain a barrier for many organisations.
The housing sector can play a vital role in driving economic recovery by creating skilled jobs in construction and green technologies. By integrating housing programmes with broader economic strategies, Scotland can support local economies while addressing housing needs.
A Proactive Approach to Housing Challenges
The budget highlights the need for the housing sector to evolve from reactive to proactive management. Issues like damp and mould must be tackled before they escalate, reducing costs and improving tenant well-being. Proactive solutions, such as using data to identify high-risk properties, can enable housing providers to allocate resources where they are most needed.
Looking Ahead
Housing is not an isolated concern but a foundation for Scotland’s social, economic, and environmental success. The budget for April 2025 reinforces this interconnectedness, yet significant challenges remain for housing providers to deliver safe, sustainable, and affordable homes.
At ARK Consultancy, we are committed to helping housing organisations navigate these challenges. From accessing funding opportunities to developing data-driven strategies, we support our clients in delivering homes that meet the needs of their communities. ASAP, our strategic asset performance model, helps landlords make intelligent use of their data and was nominated in this year’s UK Housing awards.
Damp and Mould, and how landlords deal with it, is a major challenge on the 2025 horizon. ARK are developing an intelligent solution, and we are welcoming expressions of interest here, with updates coming very soon.
By Kirsty Wells, Assistant Director at ARK Consultancy. Contact us today to find out how our experts can help your organisation.
News & Insights
Read the latest housing sector news, blogs, and commentary from ARK.

EPC C by 2030: The Clock is Ticking
By Luke Beard ·The UK government has set a major challenge: all social housing must have an EPC rating of C or above …

ARK Assistant Director Paul O’Callaghan’s 40-Mile Charity Walk for We Can Kick It
By Pete Evans ·ARK proudly supports Paul O’Callaghan’s 40-mile walk for We Can Kick It, raising funds for children battling cancer through football …

Helping Housing Associations Navigate Strategic Risks in 2025
By Helen Scurr ·This article discusses the key risks facing housing associations in 2025, as revealed by Inside Housing’s 2025 Risk Register survey. …
Subscribe to our newsletters for the latest industry insights
Our newsletters and reports will keep you updated on topical issues from the sector as well as what’s happening at ARK.