Campaigners have criticised the Scottish government over its “appalling” plan to dramatically cut its housing budget next year.

Shona Robison, the Finance Secretary, yesterday announced Holyrood’s draft spending plans for 2024/25 and claimed it would protect public services.

But official documents published shortly after the SNP minister’s speech revealed that spending on housing will fall by more than £200m for the next financial year.

Both the housebuilding and fuel poverty budgets are among those which will be adversely affected.

The total amount spent will go down from £738.3m in 2023-24 to £533.2m in 2024-25.

The biggest cut will be felt in housebuilding, with a drop of nearly £190m in funding.

The money available for building more homes will fall from £564.6m in 2023-24 to £375.8m in 2024-25.

Funds for fuel poverty and housing quality budgets are also being cut sharply, from £21.8m to £1.7m.

Aditi Jehangir, Secretary of Living Rent, said: “The Scottish Government’s decision to cut 200 million from the housing budget is appalling.

“One after another, councils are declaring housing emergencies because they simply cannot fulfil their statutory duties to house homeless people.

“Rents are at record level as the regulations are still too easy on landlords. Tenants’ physical and mental health is worsening because of their housing situation.

“The government is totally out of touch with the reality on the street and faces a sharp and dire reckoning.

“They need to commit more funding to deliver more social and council homes and clamp down on rising rents. In the meantime, we’ll be paying the price of their utterly baffling decisions.”

Propertymark also criticised the Scottish government’s budget statement for failing to introduce measures to tackle the housing emergency with a failure to recognise the impact of tax and investment on affordability and demand for homes.

Timothy Douglas, head of policy and campaigns at Propertymark, said: “There is a huge demand crisis in the private rented sector that the Scottish government is failing to address. Scotland remains the most expensive place to invest in the private rented sector across the UK and we need to see more support through grant funding to help agents and their landlords to improve the energy efficiency of homes.

“The Cost-of-Living legislation has raised costs for renters and it’s now imperative that the Scottish Government carry out a review of all taxes impacting private landlords and the wider property sector in order to introduce policies that help meet the demand from renters and tackle the housing emergency.”

David Alexander, chief executive of DJ Alexander Ltd, commented: “The Scottish budget was a missed opportunity to address some of the key issues affecting the housing sector in Scotland. There is to be a £550m investment in the supply programme for rent, social rent and affordable home ownership but given the scale of demand and the waiting list for social housing this, although a large amount of money, is still not sufficient to address the issue.

“In many local council areas, the wait for social housing is measured in years and sometimes in decades. This is an issue requiring sustained major investment over a prolonged period and the current announcement is welcome but clearly not going to meet demand in the next five to ten years.”

“There is no change to Land and Buildings Transaction Tax (LBTT) which makes Scotland much more expensive to buy property at a very early stage. First time buyers are more punitively hit than anywhere else in the UK with tax starting at £175,000 compared to £425,000 in England and Wales. While any property over £325,001 attracts a 10% charge which doesn’t occur south of the Border until properties cost more than £925,000.”

Alexander continued: “There is an additional £358m provided to accelerate the installation of clean heating systems but given that this represents just over 1% of the anticipated £33bn costs of the implementation of these energy efficient products it is clear that the homeowner is still being asked to stump up for the Scottish government’s green ambitions.”

“With higher personal taxes than anywhere else in the UK and higher house purchase costs it is hard to see how these policies make Scotland an attractive place to live and work. This budget was an opportunity to encourage more housebuilding, to address serious shortages in the number of social housing available, and to attract higher earners to live and work here. Unfortunately, I think that it has been a missed opportunity on all counts.”

Pressed on why the Scottish government had slashed the housing budget by Tory MSP Miles Briggs Shona Robison, the Finance Secretary, said: “The UK Government cut the housing budget.

“I find it astonishing that we have members of the Tory party demanding we spend more money on areas that their government have cut, meaning we don’t get any consequentials.”