Since the Scottish Government announced a national housing emergency on 15 May 2024, the number of new build starts and completions has continued to fall, with the latest statistics published on 31 March 2026 revealing that the number of social housing starts are now at the lowest level since 1997 and private sector starts are at the lowest since 2013 (excluding COVID).
On 22 January 2026, the First Minister announced the Scottish Government’s intention to establish More Homes Scotland (MHS), a new national housing agency, to enable the delivery of housing of all types to meet housing need across Scotland.
The process to co-design the functions and operating model of the new agency will be led by the Cabinet Secretary for Housing in partnership with local authorities and the Scottish National Investment Bank (SNIB) and the initial announcement indicated that its focus will be on:
- large-scale affordable housing projects;
- rural and island housing;
- acquiring, preparing and releasing land;
- enabling infrastructure work to unlock stalled sites; and
- closer working with SNIB to make best use of private finance.
In a letter to the Local Government, Housing and Planning Committee on 25 March 2026, the Cabinet Secretary provided an update on the agency’s intended key operating principles and priorities.
Top of the list is increasing the supply of affordable homes with MHS being tasked with stretching the Affordable Housing Supply Programme flexibilities, simplifying funding routes, targeting funding to places and people in housing need; and streamlining the process for acquiring new homes, optimising the benefits offered by multi-year funding commitments.
A new regional approach is advocated, in which MHS can aggregate schemes which will benefit rural areas where smaller schemes can make a significant local impact but can face viability challenges.
Next on the list is partnership working between MHS and the Scottish National Investment Bank (SNIB) to deliver an increased role for public commercial capital in unlocking and accelerating cross-tenure development, with an additional £135million being given to the Bank subject to the outcome of the Scottish Parliament elections in May.
At the same time, MHS will work with SNIB to encourage new entrants into the affordable housing market and attract private investment into housing from a variety of sources, including the Scottish Local Government Pension Scheme.
Again subject to the outcome of the election, MHS will administer a First Home Fund, supporting first time buyers with up to £10,000 towards a deposit to purchase a home.
Over the coming year, MHS will expand its work with local authorities, regional, rural and public and private partners to support the delivery of more homes in rural and island communities, such as the SSEN key worker housing which becomes affordable legacy homes in the longer term. MHS will provide modest capital grants from the Rural and Island Housing Grant Scheme to help meet the costs of buying a home and supporting more properties in rural/island areas to be used as permanent homes.
Facilitating regional cooperation to achieve scale and aggregation is to be a key priority for the agency and MHS will work with small and medium enterprises to address supply chain issues and enhance collaboration, supporting the use of Modern methods of Construction and identifying where standardised designs could deliver efficiencies.
Land assembly is also highlighted as a priority for MHS in 2026-27 including identification of innovative funding approaches to unlock infrastructure and land remediation barriers. It will use powers under a modernised compulsory purchase system to help with land assembly. The agency will also work across government portfolios to identify suitable public sector owned land which could be made available to affordable housing development to support strategic housing delivery.
On the planning front, MHS is to offer planning surge capacity to local authorities with the express purpose of expediting strategic planning applications and consider standardisation to accelerate planning determinations. The agency will continue the work of the National Planning Hub on stalled sites.
While housebuilders welcomed the establishment of MHS, it’s certainly not a quick fix as the Cabinet Secretary confirmed that the agency won’t be launched until 2027-28 and will not be fully functional until 2028-29. The intervening period will be used to test and refine the operating model.
We would suggest that that operating model should include the following powers/actions:
- In order for MHS to actually deliver more homes in Scotland, it must be permitted to operate on an independent commercial basis.
- As an independent actor in the market, MHS should not be dependent on, nor restricted to, supporting other bodies (public or private sector).
- As indicated by the Cabinet Secretary, MHS should have the power to assemble land for housebuilding by public/private developers. This will involve taking risks as it will have to take on complicated and compromised sites which require more early investment in terms of site preparation and building out before seeing any returns.
- As administrator of grant funding, the agency could decide that in certain circumstances a proportion of the affordable housing supply budget should be used for paying for the infrastructure required to open sites up to support all tenure delivery rather than (or in addition to, but at a lower grant:debt ratio) supporting the cost to affordable housing providers of land and development costs.
- With too many local development plans stuck demonstrating how their local housing requirement compares to the Scottish Government Minimum All-Tenure Housing Land Requirement, MHS should be responsible for setting a national housing target of all tenures and then ensuring that the target is achieved at local level.
- As part of that, and building on the existing notification direction, the agency should create a central depositary of all planning applications for housing to give it visibility about delivery across Scotland. It should then co-ordinate statutory undertakers and guide local authorities on what infrastructure will be needed and the most effective way of achieving delivery within the timescales needed to meet target numbers. It should be given the power to intervene and provide assistance to planning authorities or to call-in applications where they go beyond the statutory determination period.
- Finally, MHS should oversee all regulations which would impact on the delivery of more homes, removing the current silo approach which has seen additional regulations add to construction costs at a time when the housebuilding sector is already struggling.
With clear goals and a free rein, MHS could well be the vehicle which delivers more homes in Scotland, but it will need a dynamic and ambitious leader, a team dedicated to achieving its aims, and support from the public and private sector. As a nation, we can’t afford for it to fail.
The above is an amended version of the article which originally featured in The Business supplement of The Sunday Times on 12 April 2026
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