Scotland's housing emergency, now approaching its third year, is on course to worsen significantly unless ministers act swiftly, according to a new Homes for Scotland (HFS) report on land supply and delivery.

Drawing on detailed analysis of local authority housing land audits, HFS says annual housing completions could slump to as low as 5,000 by 2031 as a direct consequence of planning policy failures. That compares with 19,797 homes completed in 2024, the most recent full year available. The organisation adds that this forecast does not reflect the added cost and complexity from wider regulation, which it says is further constraining delivery across tenures.

HFS argues that insufficient land is progressing through the planning system to sustain a viable pipeline that meets Scotland's needs. It attributes this to National Planning Framework 4 (NPF4), introduced in 2023, which it says has left 60 per cent of Local Development Plans (LDPs) out of date. With many new LDPs not expected until 2029, HFS warns that the most deliverable allocated sites are being built out while constrained or unviable sites remain and cannot be replaced with ones capable of delivering homes.

Given that it typically takes around four years from submitting a planning application to handing over completed homes, HFS projects a continued decline in output and cautions it could be 2033 before volumes begin to recover.

HFS Director of Planning Kevin Murphy said: "Let's be clear, the housing emergency has been decades in the making. Whilst we have welcomed the principle of the recently announced More Homes Scotland agency, this won't be fully operational until 2028/29. We just don't have that time to lose.

-- Advertisement --

"Frustratingly, this new report only confirms the specific concerns we have been expressing to Ministers and officials since before NPF4 was introduced. However, rather than the Scottish Government addressing these and taking the necessary corrective action, we find ourselves with yet another consultation which describes "a living pipeline of land" with planning permission being "in place for at least 164,000 homes" which have not yet been built.

"As our research shows, this simply isn't the case. Such narrative belies the wide-ranging, lengthy, complex and costly challenges that the home building sector has to face in delivering much-needed homes of all tenures."

Responding to the claim that permission exists for at least 164,000 unbuilt homes, HFS says its research indicates that just over half (around 86,000) are controlled by home builders with detailed consent, and more than three quarters of those sites — from small schemes to developments of over 3,000 homes — are already under construction. It adds that more than a quarter (about 43,000) are in the hands of non-home builders, including councils and public bodies. Against a stated ambition to deliver 25,000 homes per year, HFS argues this equates to less than three years of consented supply, insufficient for businesses to plan investment and work programmes with confidence.

"The truth is planning policy, particularly transition from NPF4 to LDPs, is exacerbating rather than addressing the fundamental problem which lies at the heart of the matter: the chronic undersupply of effective land on which to build homes. In the context of only 1.4 per cent of Scotland's land being in residential use, it is a shocking and untenable state of affairs that more than one in four Scottish households have been identified as being in some form of housing need."

To restore investor certainty and unlock delivery, HFS proposes immediate measures including reinstating the presumption in favour of sustainable development (or a similar mechanism) so new, deliverable sites can progress during the transition from NPF4 to fresh LDPs. It also points to the potential of Masterplan Consent Areas, currently being rolled out in Highland, as part of the solution.

Murphy concluded: "We continue to stand ready to work with the Scottish Government to implement effective, data-driven solutions and have demonstrated our commitment to this through the identification of specific barriers and the action required to overcome them. I sincerely hope Ministers and officials ensure positive rhetoric translates into effective action before we see any more investment diverted elsewhere in the UK and lose any more of our SME home building base which is now at its lowest level in 20 years."