The Plan Is In: Scotland's Strategy To Combat The Housing Emergency

In September 2025, the Scottish Government published its long-awaited Housing Emergency Action Plan, which sets out the steps the Scottish Government has taken since declaring the housing emergency in May 2024, and what new actions will be taken to address both immediate and long-term housing pressures.

For housebuilders, developers, and landowners, the plan represents both a challenge and an opportunity. Below, we outline the key provisions most relevant to the development sector.

Priority actions

The actions identified are all aimed at achieving three key objectives:

1. Putting an end to children living in unsuitable accommodation;
2. Supporting the housing needs of vulnerable communities; and
3. Maximising investment in Scotland's housing sector.

Objectives one and two are hugely admirable goals and build on the priorities outlined in the Programme for Government. Some of the actions aimed at achieving these objectives include:

1. increasing the budget for acquisitions to increase the supply of affordable housing;
2. raising standards and quality of rented accommodation by introducing Awaab's law; and
3. establishing a £1 million fund to assist survivors of domestic abuse to leave an abusive partner.

Objective three is an acknowledgement that in order to effectively tackle the housing crisis, the private sector must be involved and allowed to be part of the solution. While this acknowledgment may have been long overdue, it does signal a change in approach and attitude from the Scottish Government which can only be welcomed.

All-tenure approach

Actions aimed at maximising investment in Scotland's housing sector include:

1. delivering £4.9 billion of investment over the next four years, with homes being delivered through public and privately leveraged investment;
2. introducing a new all-tenure delivery ambition, working with the housebuilding sector to increase housing delivery by at least 10% over the next three years; and
3. through the collaboration of the National Planning Improvement Champion and the National Planning Hub, improve customer service in planning departments including a "sprint to strengthen service quality" by the end of 2025.

While very encouraging, it remains to be seen whether these actions can be delivered and more importantly delivered at speed. The funding announced in the plan will not be fully known until the forthcoming Spending Review (now expected early 2026), meaning it will likely be a further four months before specific details are set out. Ultimately, this investment and all-tenure approach coupled with the planning directions introduced by the plan sets the tone for a much more interventionist approach to housing supply.

Planning reform and delivery acceleration

The sprint to improve service in planning departments will need to show results quickly considering that the creation of the Housing Planning Hub was announced in November 2024, with little tangible on-the-ground progress being achieved since then. Local planning departments remain under resourced and deserve further support in ensuring the Scottish Government's expectation of an "emergency-led approach to decision making" can be achieved.

In addition to the plan, further levers are being pulled to assist with tackling the housing emergency, namely:

1. The Chief Planner's letter of 2 September directing planning authorities to notify the Scottish Government of any planning applications for 10 or more homes on non-allocated land, which should assist with evidence-led monitoring of the application of NPF4 Policy 16 (Quality Homes);
2. The recently announced consultation on permitted development rights to support the provision of new homes considers how existing permitted development rights could be amended to encourage use of such rights in order to provide new housing in rural areas; and
3. The updated draft guidance on planning obligations and good neighbour agreements highlights the importance of both proportionality and viability when determining developer contributions.

The role of SME's

The Scottish Government will issue a joint ministerial letter to planning authorities and amall and medium-sized enterprises (SME's), stressing the role of smaller developers in bringing forward brownfield and rural housing. This again emphasises the need for proportionality in the planning system to facilitate delivery. The planning consultation on accelerating build out of new homes will be extended to cover measures for SMEs.

Developers, particularly SMEs, may find opportunities where local plans have been slow to allocate sufficient land.

Joining forces across the sector

While none of these steps on their own will solve the housing crisis, they form part of a new holistic approach from the Scottish Government to tackle both immediate and long-term supply issues. Most importantly, it signals a more proactive stance by the Scottish Government in addressing the housing crisis. Everyone in the development sector is being called to do their part, with the Cabinet Secretary for Housing, Màiri McAllan, stating that the private and public sectors need to "pull together and deliver this plan".

The plan appears to have been received positively by the development and housebuilding sector. Homes For Scotland have welcomed the plan, noting it reflects "positive change".

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.