IN Brief:
- The provisional Scottish social housing tender price index fell 2.1% between January–March and April–June 2026.
- April–June prices remained 1.2% higher than a year earlier, according to the Scottish Government.
- Only eight accepted projects underpin the latest reading, which may be revised when additional tenders arrive.
The Scottish Social Housing Tender Price Index recorded a provisional fall of 2.1% between January–March and April–June 2026, according to figures released by the Scottish Government on 12 October. Although the latest quarterly reading declined, the index remained 1.2% above the same period of 2025, producing different results depending on whether prices are compared quarter on quarter or year on year.
Only eight accepted projects underpin the April–June 2026 calculation. The government classifies the figure as provisional and expects revisions as further tenders are indexed. The limited sample means the quarterly decrease cannot yet be taken as evidence that construction prices have fallen consistently across Scottish social housing, or that the same movement is occurring in other sectors of the building market.
The official release also confirms a firmer reading for October–December 2025. That quarter's index, now based on 23 projects, was 2.1% higher than the preceding quarter and 8.0% above October–December 2024. The firm annual rise describes an earlier period in the series; it does not contradict the more recent provisional annual increase of 1.2% for April–June 2026.
The index measures tendered prices for the construction of affordable housing in Scotland, using information from accepted bids rather than invoices for work already completed. A tender price reflects the contractor's assessment of the required work when the commitment is made, including labour, materials, plant, preliminaries, risks and the conditions of procurement. It can move differently from the prices paid for individual building products or the eventual cost of delivering a completed development.
Project comparisons require adjustments because an apartment development and a group of houses cannot be treated as identical units of construction. The index uses models of dwellings distinguished by configuration, occupancy and floor area, with adjustments for design and specification. Project indices are then normalised for location and development size before being averaged into a quarterly series and smoothed to account for variations in the number of tenders available.
That methodology reduces some distortions caused by changes in the mix of schemes, but it cannot eliminate the uncertainty created by a small number of accepted tenders. A single quarter may include developments with unusual site conditions or infrastructure requirements. Even with design and location adjustments, the latest sample cannot establish how every social landlord's next project will be priced, particularly where procurement routes and contractor capacity differ.
The series has an operational role in Scotland's grant-supported housing programme. The government's Housing Tender Return is completed by local authorities and registered social landlords seeking grant support for eligible social rent, mid-market rent and new-supply shared-equity construction. It compares actual tendered works costs with indicative costs derived from base tables that are updated using location and inflation measures, including the social housing tender price index.
An index movement can therefore influence the benchmarks used to assess funding applications, but it does not determine the construction budget for a particular scheme on its own. Ground conditions, drainage connections, utility capacity, building height and specification affect what contractors include in their bids. Procurement at different stages of a programme may also expose schemes to differing material prices, available labour and competition for work.
Tender prices and construction input costs are related without necessarily moving together. Contractors facing higher material or fuel costs may absorb some pressure within their bids when competing for work, whereas limited specialist capacity or difficult programme requirements can increase accepted prices. The eventual effect depends on the workload and risk associated with the specific contract, not solely on a published index percentage.
The broader UK tender market offers a separate, differently constructed measure. The Building Cost Information Service estimated annual growth of 3.2% in its All-in Tender Price Index for the third calendar quarter of 2026, based on a panel of cost consultants. Its coverage, methodology and reference period differ from Scotland's accepted-tender social housing series, so the two annual rates are not interchangeable or suitable for a direct sector comparison.
The Scottish Government's latest figures cover April–June even though the report is published in October and carries a September 2026 report title. The designation of first quarter 2026/27 follows the financial year, which begins in April. The firm October–December 2025 observation corresponds to the third quarter of 2025/26, rather than the third calendar quarter of 2025.
Further tender returns will determine whether the provisional 2.1% decrease is maintained or revised. The publication provides a measurable change in accepted prices for the schemes currently indexed, while the eight-project sample and the higher year-on-year reading limit conclusions about the direction of the wider Scottish construction market.
