As trailed in the Planning and Housing Emergency Action Plan and more recently the Housing Emergency Action Plan, the Scottish Government has published a consultation paper on Accelerating home building in Scotland.

The paper starts from the premise that National Planning Framework 4 (NPF4) policy has been designed to incentivise developers to build out sites allocated for housing more quickly, with provision for additional land to come forward where it can be demonstrated that delivery is happening faster than anticipated.

However post adoption of NPF4 in February 2023, rather than delivering more homes more quickly, new housing starts and completions have fallen to their lowest levels since 1997 (social housing) and 2013 (private housing).

Previously, the presumption in favour of sustainable development allowed for additional unallocated land to be released if there was insufficient land for housing available, but NPF4 swept the presumption away.

The consultation paper notes that the challenges facing the housebuilding sector are not new and summarises previous initiatives dating back to 2016 and more recent measures such the formation of the More Homes Scotland agency; reform of the compulsory purchase legislation; encouraging the use of masterplan consent areas; and setting up the National Planning Hub.

The Scottish Government estimates that planning permission is in place for at least 164,000 homes which have not yet been built; a figure which it acknowledges is disputed by housebuilders who in turn point to a lack of available land for housing as a major contributory factor in the decline in the number of new build starts and completions.

The consultation paper identifies 4 options which could be deployed to overcome current barriers to housing delivery and seeks views on their deliverability and impact.

Option 1: introducing fiscal measures to tackle inactivity or slow build-out

Citing examples from other jurisdictions, the consultation paper suggests that mechanisms to financially stimulate faster build-out rates could include:

  • applying a relief or supplement to taxes such as the Scottish Building Safety Levy (SBSL) or Land and Buildings Transaction Tax (LBTT) where development is, or is not, built out to an agreed timeframe.
  • applying a tax on land which is allocated in local development plans (LDPs), but which has not been brought forward in a planning application as per the programming submitted when the LDP and its Delivery Programme were being prepared. Consideration will need to be given to sites where there is no clear route to delivery or commitment to programming.
  • applying a tax on sites which have planning permission, but where there is no activity on site or progress is evidenced to be unreasonably slow.

The consultation paper advises that the priority is to stimulate build-out rates rather than raise revenue and so a tax rather than a penalty may be more conducive to delivery, but recognises that creating a new tax would bring challenges such as calculating the value to which the tax would apply.

Responsibility for administering a local tax would lie with local authorities, but introducing a new local tax would require UK Government approval.

Potential consequences/issues with Option 1 include:

  • liability that planning permission would impose on landowners.
  • potential for blight arising from allocation in LDPs.
  • potential requirements for the land to be purchased by the authority where an owner is unwilling or unable to comply.
  • possibility of requiring consent from a landowner for allocation of their land in an LDP or to apply for planning permission on their land.
  • possibility of disincentivising landowners from bringing forward sites for inclusion in LDPs or for planning permission.

Option 2: monitor build-out rates and intervene when these are unreasonably slow

Referencing the Competitions and Market Authority study into housebuilding across the UK and its suggestion of a “use it or lose it” approach to planning permission to stimulate housing delivery, the consultation paper highlights that the current planning system already involves notification of initiation and completion of development and planning authorities can serve completion notices in certain circumstances.

In order to proactively manage the pipeline of deliverable housing land, the consultation papers suggests that measures could include:

  • extending existing reporting requirements, to require a build-out statement/schedule and annual reporting of development progress (a “development progress report”) to planning authorities. This could support preparation or review of housing land audits and LDP delivery programmes.
  • linking these powers to terminate planning permissions after an agreed or national fixed deadline, or where the planning authority considers progress to be unreasonable.

Possible consequences/issues with Option 2 include:

  • the reasonableness of this approach given the range of barriers to development delivery such as development costs, site complexities and infrastructure provision.
  • the time required to introduce primary and/or secondary legislation.
  • who should be penalised for non-compliance - the landowner or the developer?
  • how should a change of ownership be handled, for example with regard to enforcement?
  • would there be a need for owners to consent to the submission of planning applications, given subsequent liabilities?
  • compliance with human rights legislation.

Option 3: reduce procedural time and costs for SME developers

In recognition of the impact which timescales and costs of providing information during the consenting process has on small and medium (SME) housebuilders, the Cabinet Secretary for Housing and the Minister for Public Finance wrote to planning authorities on 2 September 2025 calling for proportionality in terms of information requirements in respect of planning applications by SME housebuilders and development on smaller sites

The consultation paper looks at what measures could be deployed to enshrine proportionality further within the planning process, such as:

  • building a process through legislation for fast-tracking applications on smaller sites.
  • reviewing and further rationalising requirements in NPF4 for smaller sites to allow developers to bring forward applications more quickly and at a lower cost. Alternatively, a rules-based policy could sit alongside NPF4, setting out a simplified set of policy tests for very small and small sites to meet
  • advice could be provided on planning application information requirements, setting clearer and more streamlined expectations nationally. This option has connections to Option 4 on diversifying output from larger housing sites.

Possible consequences/issues with Option 3 include:

  • the time required to introduce legislation.
  • creating more categories in the hierarchy of development would open the possibility of a variety of tailored policy and guidance approaches for smaller sites.
  • the vast majority of planning applications are already delegated to officers for decisions so the impact would likely therefore be dependent on changes in information requirements for smaller sites, driven by policy changes that would also need to be consulted upon and impact assessed.

Option 4: diversify the housing outputs from deliverable land

The consultation paper highlights analysis in England that concluded that “the homogeneity of the types and tenures of the homes on offer on [large] sites, and the limits on the rate at which the market will absorb such homogenous products are the fundamental drivers of the slow rate of build-out” which has led to UK Government proposing to set thresholds for larger development above which development would require to be mixed tenure and would require housebuilders to work in partnership to delivery homes on larger sites..

In Scotland, NPF4 Policy 16 already requires LDPs across all areas to take account of diverse needs and delivery models and it is existing practice in some cases for larger sites to be delivered by a range of partners offering a range of house types. Masterplan Consent Areas encourage collaborative delivery, with planning authorities taking the lead.

The consultation paper suggests that current practices could be extended, with particular reference to alternative models of delivery such as build-to-rent, off-site construction and custom build, with the goal that new LDPs allocate sites to accommodate as wide a range as possible of sizes, types and tenures of development. Options to achieve this could include:

  • developing existing policy requirements to shape how sites are appraised and selected for allocation in LDPs, and how delivery expectations regarding diversity of housing type and tenure are then specified.
  • requiring a diversity of housing types and tenures on sites above a fixed size threshold.

Possible consequences/issues with Option 4 include:

  • there may be limits to the level of impact that this intervention would have given other drivers of commercial decisions, including the wider market and economic context, the cost and availability of labour and materials, and the need for continuing innovation by industry.
  • While guidance and sharing of good practice could be prepared in a fairly short timescale, it would be important to avoid creating new requirements for the LDP preparation process that could trigger delays to the adoption of these plans.
  • creating requirements for sites above a threshold size to include a range of housing sizes, types and tenures (for example, build to rent, purpose-built student accommodation, low cost home ownership) would require legislation rand so would take some time to implement.

Consultation questions

The consultation paper poses a number of specific questions under each option and also invites suggestions for other measures which could be used to deliver more homes at pace.

Conclusion

When reading the consultation paper, you can’t help but feel that the Scottish Government has employed the carrot and stick motivational approach to get what it perceives to be the housebuilding donkey moving again, albeit with more stick than carrot.

Options 1 and 2 appear to rely heavily on punishment rather than incentive, indicating a continuing belief that the housing emergency is rooted in housebuilders’ behaviours rather than NPF4 Policy 16’s change of approach to housing, market conditions or rising construction costs.

Options 3 and 4 are already happening, or could be, under the current planning system through the positive and proportional approach to housing and placemaking already advocated by the Cabinet Secretary to planning authorities.

With the national housing emergency fast approaching its second anniversary and new LDPs slipping beyond the May 2028 target date, the greatest concern with the suggested options is the acknowledged time that they would take to be put in place. Without immediate intervention, housing delivery will continue to decline.

Giving more weight to the housing emergency and reintroducing the presumption in favour of housing as sustainable development until new LDPs are in place would be the quickest way to get delivery moving forward again.

Perhaps that’s a measure to be suggested when responding to the consultation.

The consultation runs until 30 April 2026.

Contributor

Elaine Farquharson-Black

Partner