As Homes for Scotland warns that the housing emergency is set to develop into a catastrophe for Scotland, the Scottish Government has issued a number of updates on measures which have been, or are being, taken to support housing delivery.
A new report issued by Homes for Scotland highlights that new build housing completions could fall to as low as 5,000 per annum by 2031 as a direct result of what is perceived to be failing planning policy. The industry body fears that the actual number of completions could be even lower as this figure does not include the impact of wider regulation which it says makes it increasingly difficult and more expensive to build the range of homes required to ensure the country’s social wellbeing and economic success.
Central to the falling number of completions is the dwindling housing land supply post the introduction of National Planning Framework 4 (NPF4) and its removal of a requirement on local authorities to maintain a minimum five year effective housing land supply at all times. With the abolition of the presumption in favour of housing as sustainable development, where the housing land supply drops below five years or a local development plan (LDP) is more than five years old (over 60% of LDPs are now more than five years old), there are limited opportunities for the land supply to be replenished.
Only approximately 27% of new LDPs have so far made it through the evidence report gatecheck process which means that most authorities won’t have new LDPs with new housing land allocations in place until 2029 or beyond. Homes for Scotland has highlighted that since it takes around four years from submitting a planning application for housing until delivery of new homes, it could be 2033 before completions start rising again.
In the most recent Ministerial and Chief Planner letter, the Scottish Government recognises and shares the concerns about the pace of LDP progress across Scotland and the likely failure to meet the expected timescales of having all plans in place by May 2028. The letter points to the Local Development Plans (LDP): Action Plan and Advice on Evidence Reports and Gate Checks which contains updated guidance on what should be included within the housing and infrastructure chapters of an evidence report. The guidance makes it clear that Ministers expect a positive and ambitious approach, with the indicative Local Housing Land Requirement exceeding the Minimum All Tenure Housing Land Requirement.
Recognising the plan-led approach and the importance of avoiding impacts from extended plan preparation timescales, the Ministerial and Chief Planner letter includes an expectation that once published, significant weight will be given to proposed LDPs, including site allocations, in the decision-making process. This will be a change of approach for some planning authorities who have historically placed little weight on draft plans pending examination by a reporter.
Extending permitted development rights (PDR) had also been considered an option to support the provision of new homes, including extending PDR to cover town centre living and introducing new PDR for new build homes in certain circumstances in rural areas. Following a review of responses received during consultation on the options, which showed little support and a number of concerns about the options (including the potential quality of the new homes which might be delivered and the lack of opportunity to positively improve the amenity of new homes) the Ministerial and Chief Planner letter advises that they have decided not to extend PDR for new homes at this time.
On the regulatory side, the Scottish Government had committed to reviewing existing regulation within the housing sector as part of the 2025-2026 Programme for Government, and it has now published its report on that review: Better Regulation: supporting economic growth and investment. The report identifies the current roads bond system as a contributor to slower housing delivery and proposes reforming the road bond system. It stresses that it is not about deregulation; it is about ensuring that regulation enables delivery and investment in housing during a time of national emergency. Over the next six months, the Scottish Government will explore and test alternative approaches to road bonds that provide the necessary assurance and avoid barriers to development.
The Scottish Government’s hope is that by reforming regulatory barriers in housing, it will unlock investment, accelerate delivery, and help meet Scotland’s housing needs, to better support communities and drive economic growth.
And as the Scottish Parliament entered its pre-election recess period on 26 March, the Cabinet Secretary for Housing wrote to the Local Government, Housing and Planning Committee to update it on the design and set-up of More Homes Scotland (MHS), the new housing agency.
The letter identifies four clear themes for the new agency’s mission: meaningful, system wide reform; regional collaboration and local flexibility; data and long-term insight; and pipeline of accelerated planning.
The Cabinet Secretary identifies what she sees as the key operating principles and priorities critical to the success of MHS. It is to be about simplicity, scale and speed balanced with fairness and opportunity.
With increasing the supply of affordable homes and tackling the housing emergency her top priority, Màiri Macallan will look to MHS to stretch the Affordable Housing Supply Programme, simplify funding routes, ensure funding delivers for the people and places in need and optimise the benefits of multiyear funding commitments. It is hoped that new entrants to the affordable housing market will be attracted through Fund based approaches for mid-market rent. Public land, where appropriate, should be considered for affordable housing development.
On the private side, MHS will partner with Scottish National Investment Bank to deliver and increased role for public commercial capital in unlocking and accelerating cross-tenure development.
Facilitating regional co-operation to achieve scale and aggregation is also seen as a key priority for MHS and working with SME housebuilders, MHS will help address supply chain issues.
Making greater use of existing land assembly and preparation powers is another intended priority for MHS, including testing the impact of providing funding to support housing-led regeneration through land remediation and repurposing buildings.
On the planning side, MHS is to prioritise boosting capacity within the planning system, offering planning “surge capacity” to local authorities with the express purpose of expediting strategic planning applications and will look at standardisation with a view to accelerating planning determinations.
The Cabinet Secretary highlights that her letter is not the end of the development of MHS, rather the intention is to finalise the MHS operating model through delivering, testing, learning and refining ahead of launching the agency in 2027-28 and it becoming fully functional in 2028-29.
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