The two main sources of investment in new social housing in the United Kingdom are central government funding and planning agreements between private developers and local authorities, under which the developer contributes land, housing or cash as a condition of planning permission.Planning obligations to support the provision of social housing are known as Section 75 Agreements in Scotland and Section 106 Agreements in England and Wales[1]. Agreements must be directly relevant to the proposed development, prescribe a given portion of housing that is affordable and compensate for loss or damage created by a development (for example, loss of open space), or mitigate a development’s impact (for example, through increased public transport provision). Around a third of all affordable housing delivered in Scotland between 2007 and 2012 involved some form of development contribution.[1] In England, section 106 supported the development of 28,000 affordable homes in 2019, almost half of all such units.[2] Despite their significance, the United Kingdom Government planning reform has proposed the abolition of section 106 agreements in the future.[3] Scottish land policy continues to support affordable housing development through securing land for such development. Any land gained through development contributions is transferred to registered not-for-profit social landlords. Only landlords operating on a not-for-profit basis can receive land development contributions and provide social housing. The usual arrangement between a local authority and a private developer is that, before 30 per cent of the market units have been completed, land for 25 per cent of the residential units will be passed on to a registered social landlord at nil value.[1] The registered social landlord will normally then develop the affordable housing land.[2]

Since 2016 the Scottish government has increased investment in affordable housing alongside pro-social land policies, producing more than 50,000 additional units in just three years. This has taken place in combination with needs assessment and social housing investment plans, which are discussed in subsequent chapters on governance and finance.