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Scotland\u2019s housing crisis will not be resolved until policy makers and planners understand the commercial viability of developments, according to a sector group.<\/p>\n
Homes for Scotland (HFS) has set out the \u201ccommercial realities\u201d that determine whether land allocated for housing can realistically be brought forward. <\/p>\n
In a new report Development Viability \u2013 Housing<\/em> highlights how rising costs, infrastructure requirements, planning obligations, policy expectations and market conditions can all affect whether sites are capable of being delivered.<\/p>\n The report comes amid growing concern over stalled housing sites, a rapidly shrinking supply of effective housing land, and continuing pressure on housing starts and completions.<\/p>\n HFS says viability must be considered more consistently by policy makers, planning authorities and elected decision-makers if Scotland is to respond effectively to the housing emergency.<\/p>\n The report also stresses that viability is not fixed. Sites that appear deliverable at allocation stage can become unviable as costs rise, policy requirements change, market conditions shift or new technical information emerges.<\/p>\n It comes after comments at a recent property summit at Hampden Bank in Edinburgh where Ali Afshar, managing director of AMA Homes, said the housing sector was effectively stalled by the cost of building. This was eroding margins and making projects unviable.<\/p>\n He repeated the findings of\u00a0Savills analysis\u00a0showing that housing completions fell by 13% in 2025 to just 17,336 homes \u2013 the second lowest annual total since 2016.<\/p>\n The slowdown comes despite a slight recovery in planning applications, pointing to a fundamental issue of sites entering the system but increasingly unable to progress to construction.<\/p>\n Business Bulletin:<\/strong>\u00a0Sign up for our breakfast email of the day\u2019s breaking news<\/em><\/p>\n Commenting on the HFS report, Kevin Murphy, its director of planning, said: \u201cScotland\u2019s housing emergency will not be resolved unless there is a stronger understanding of the commercial realities of development. <\/p>\n \u201cThis is essential to turn housing ambitions into much-needed homes on the ground. High expectations are one thing\u00a0 but these must be deliverable. <\/p>\n \u201cIf the combined cost of policy, infrastructure and planning requirements makes sites unviable, the result is not better places, it is fewer homes of all tenures because it simply doesn\u2019t make financial sense to build them \u2013 whether in the private or social sectors.<\/p>\n \u201cWe want to work constructively with the Scottish Government, local authorities, heads of planning, planning committees and elected members to support a more consistent, transparent and deliverable approach to housing land supply.\u201d<\/p>\n The report recommends that viability is considered earlier and more consistently during Local Development Plan preparation, with greater clarity around infrastructure costs, developer contributions and policy requirements.<\/p>\n It also encourages early engagement between planning authorities and home builders to reduce uncertainty, support investment decisions and identify delivery risks before they become barriers.<\/p>\n HFS says Local Development Plans should allocate a greater number and range of sites than the minimum required, recognising that not every allocation will remain viable or deliverable over the life of a plan.<\/p>\n \t <\/div>\n