Housing, growth and the delivery gap: two approaches to a shared crisis

Last year, Brodies was pleased to support Prosper Scotland's report, Housing Supply for a Growing Economy, which examined the role that housing plays in unlocking economic growth across Scotland and identified a series of practical recommendations to increase housing delivery. Brodies was one of the project's partners alongside Homes for Scotland, Wheatley Group, BE-ST and the Scottish National Investment Bank. 

Twelve months on, the debate has moved beyond Scotland. Prosper UK has now published Solving the Housing Crisis: A Plan to Make Homes More Affordable in Every Postcode, a substantial review chaired by former Housing Minister, Lord Gavin Barwell, and developed with contributions from planners, developers, investors, economists and housing specialists.

Although focused on England, the report is striking because many of its conclusions echo concerns raised during Prosper Scotland's work. There are, however, also notable differences which reveal the very different policy paths being pursued north and south of the border.

The result is less a tale of two housing markets and more a reflection of a shared challenge: how to build enough homes to support economic growth.

Housing as economic infrastructure

Perhaps the strongest point of alignment between the two reports is their starting premise.

The Prosper Scotland report argued that housing should be treated as a key driver of economic growth and not simply as a housing policy issue. It highlighted evidence that housing shortages are constraining investment, economic development and labour mobility across Scotland, particularly in growth sectors such as renewable energy and infrastructure. It called for a national ambition of 25,000 homes per year and greater recognition of housing as economic infrastructure.

Since the report was published, that argument has found clearer expression in Scottish Government policy. The 2026–31 Programme for Government puts economic growth, investment confidence and the removal of barriers to development at the centre of the Government’s programme. The significance for housing is clear: the availability of homes—and the ability of the planning system to enable them—is increasingly being recognised as a condition for investment, rather than simply a social policy concern.

The proposed creation of More Homes Scotland is perhaps the clearest response to Prosper Scotland’s call for an overarching delivery body. The new national housing agency is intended to reduce duplication, assemble land, unlock infrastructure and stalled sites, support affordable and rural housing, and work with the Scottish National Investment Bank to attract private finance. Its operating model remains to be developed, but the direction is right: fragmented responsibilities need to be aligned behind delivery at scale and pace.

The Prosper UK report adopts remarkably similar language. It argues that Britain's housing shortage is now directly affecting economic performance and that improving housing affordability is essential to unlocking growth, productivity and opportunity. The report repeatedly links housing supply to wider national prosperity and identifies housing delivery as central to economic policy.

The report also acknowledges that the UK Government has not stood still. In England, it has restored mandatory housing targets, revised the National Planning Policy Framework to introduce a new approach to “grey belt” land, intervened where local plans fall behind and invested in planning capacity. The distinction is important: England is pursuing more assertive planning and market intervention as part of its growth mission and ambition to deliver 1.5 million homes.

The programme goes beyond national planning policy. The Planning and Infrastructure Act 2025 is intended to streamline planning and environmental processes; the New Homes Accelerator is targeting stalled large sites; and the new towns programme is intended to create a pipeline of large-scale communities. The Government has also established a National Housing Bank, backed by £16 billion of financial capacity, and committed £39 billion over ten years to the Social and Affordable Homes Programme.

The Prosper UK report nevertheless argues that these reforms will not, on their own, overcome the underlying constraints created by weak demand, cumulative regulatory cost and scheme viability.

Yet, despite steps by both governments, new-build completions continue to fall and viability gaps continue to widen. In England, the full effect of the Building Safety Levy, introduced on 1 October 2026, has still to be felt. The real test is therefore not the number of initiatives announced, but whether they make more schemes deliverable.

Planning remains part of the problem

Both reports identify planning as a significant barrier to increasing housing supply, although their proposed solutions differ.

The Scottish report highlighted uncertainty, delay and inconsistency within the planning system, calling for the reintroduction of a presumption in favour of sustainable development, expedited routes for brownfield sites and greater investment in planning capacity. It also stressed the need for greater certainty around planning obligations and infrastructure costs.

Scotland has not undertaken a wholesale reset of NPF4 or restored the presumption in favour of sustainable development. It is, however, responding more directly to several of the report’s themes—planning capacity, consistency, brokerage and practical intervention on stalled sites. The consultation on accelerating home-building has also tested fiscal measures, closer monitoring of build-out rates, simpler processes for smaller sites and more diverse delivery models on larger sites. These are useful steps, but they stop short of the more fundamental policy change sought by Prosper Scotland.

The Housing Emergency Action Plan, published in September 2025, was followed by measures intended to accelerate investment in new homes. The National Planning Hub provides surge capacity and specialist support to planning authorities, with housing and renewable energy treated as priorities linked to growth. Government, agencies and industry are also working to unblock stalled sites: an initial review identified 114 sites, with action focused on barriers affecting around 11,000 homes. The real test will be whether that intervention converts permissions and allocations into completed homes.

The flagship proposal of the Prosper UK report is the creation of a National Planning Service which would determine major planning applications against locally agreed policies, alongside stronger sanctions for authorities refusing policy-compliant developments and tighter controls on statutory consultees.

Whether such reforms would ever gain political traction is another matter. However, what is notable is the growing consensus that the speed, predictability and consistency of planning decisions are now as important as the volume of land allocated for development.

Viability has moved centre stage

Perhaps the biggest difference between the two reports is the degree of attention given to development viability.

The Prosper Scotland report identified rising build costs, infrastructure requirements, regulatory burdens and policy uncertainty—including concerns about rent controls—as barriers to delivery and investment.

The Prosper UK report goes further, placing viability at the heart of the crisis. It argues that rising construction costs, regulatory requirements and developer contributions have left many consented schemes undeliverable. London is the most acute example, with housebuilders scaling back or withdrawing from new residential development because the economic and regulatory environment no longer supports viable schemes.

The report advocates a radical reassessment of section 106 contributions (planning obligations), biodiversity net gain requirements and other costs imposed on development.

That analysis will resonate in Scotland. Although the regulatory frameworks differ, viability is increasingly the decisive constraint where affordable housing requirements, planning obligations, infrastructure costs and construction inflation intersect.

Scotland's report is broader. England's report is more interventionist.

The two reports also differ in their focus.

Prosper Scotland deliberately examined issues extending beyond planning and land supply. Significant attention was devoted to rural housing, skills shortages, modern methods of construction, supply chain resilience and the opportunities presented by renewable energy investment.

The Prosper UK report concentrates more heavily on market reform. Alongside planning changes, it advocates measures including:

• a new shared equity scheme for first-time buyers;
• a strategic Green Belt review;
• development corporations for large-scale growth;
• increased use of compulsory purchase powers;
• reforms to support Build to Rent;
• replacement of Stamp Duty; and
• measures to encourage rightsizing and later living accommodation.

The contrast is increasingly clear. England is prepared to use stronger planning and market interventions where existing systems impede delivery. Scotland is moving towards better coordination and targeted delivery support, but without fundamentally resetting its planning policy framework.

The emerging consensus

Neither report suggests that a single intervention will fix the housing crisis. Read together, however, they reveal an increasingly clear consensus about what is holding delivery back and why the economic cost of inaction can no longer be ignored.

Both reports recognise that:

• housing shortages are constraining economic growth;
• planning delays continue to undermine delivery;
• investor confidence and policy certainty matter;
• the public and private sectors must both play a role;
• housing delivery requires long-term thinking rather than short political cycles; and
• doing nothing is becoming increasingly costly.

The detail may differ, but both reports point in the same direction.

Practical implications

For developers, investors, landowners and public authorities, the direction of travel is clear. Housing is increasingly being viewed through the lens of economic growth. Planning systems, infrastructure funding and regulation will be judged not only by housing outcomes, but by their effect on productivity, investment and competitiveness.

That change in policy language now needs to influence decisions on individual housing proposals. Giving proper weight to the contribution that new homes make to investment, labour mobility and economic growth at the decision-making stage could help turn political ambition into increased delivery.