Podcast: The Truth Behind the Housing Emergency

In this episode of The ESPC Property Show, Paul is joined by Fionna Kell, Director of Policy at Homes for Scotland, to unpack the realities behind Scotland’s housing shortage. From planning delays and government policy, to the role of private developers, affordable housing targets and the future of new build homes, this is a wide-ranging and timely conversation.

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Key Insights

The housing emergency: A long-standing issue

Scotland’s housing emergency is not a recent crisis but the result of decades of cumulative issues, shaped by shifting government approaches, the politicisation of housing, and inconsistent investment across tenures. Public sector housebuilding has declined significantly since post-war highs, while private developers now deliver around 75% of affordable housing through developer contributions, underlining how interdependent the public and private sectors are in meeting housing need.

Government’s crucial role

Homes for Scotland argues that the Scottish Government must provide a clear, stable operating environment for home building, backed by adequate funding for affordable housing and policies that actively support private sector delivery. A major missing piece is a strong, visible political commitment making housing a national priority, which would unlock investment and align planning, utilities and regulation. While recent steps such as appointing a Cabinet Secretary for Housing and setting a 10% increase target are welcomed, the podcast highlights that Scotland likely needs at least 25,000 - 30,000 new homes a year, with some evidence pointing to an even higher requirement.

Obstacles to increasing home building

There are multiple barriers to scaling up supply, beginning with a slow and under-resourced planning system that can take nearly a year to process applications. Competition from England, where clearer political support could divert investment, labour and materials, poses another risk, as do ambitious net-zero policies that may strain supply chains if Scotland moves faster than the larger English market. Rising regulatory costs, adding up to £20,000 - £30,000 per home, threaten viability - especially for SME builders in rural areas - while ongoing workforce shortages further constrain delivery, despite some promise in off-site manufacturing.

Benefits of new homes and the net-zero transition

New homes are a key part of the solution to both housing need and climate goals, with around 95% achieving A or B energy performance ratings, dramatically lower running costs, and emissions roughly 90% below those of homes built in 1990. Consumer demand for energy-efficient homes has risen sharply due to cost-of-living pressures and greater environmental awareness. However, the podcast notes that public understanding of upcoming net-zero requirements remains very low, and calls for stronger government-led education on changes such as the phase-out of gas boilers and future retrofit expectations.

Outlook: Cautious optimism with key concerns

The overall outlook is one of cautious optimism, driven by clear underlying demand - evidenced by research showing one in four Scottish households has some form of housing need - and signs of macroeconomic improvement. Nonetheless, the viability of SME home builders remains a major concern, particularly in rural areas where regulatory costs can make projects unworkable. Sustaining these smaller builders is essential not only for housing diversity but also for supporting rural economies, which are directly constrained by the lack of available homes.