New home completions in Scotland fall by 13% as delivery crisis deepens – Savills

Ben Brough, head of Scotland development at Savills, said: “We are increasingly seeing consented sites stall because the numbers simply don’t stack up. 

“The combination of build cost inflation, abnormal costs and fixed policy requirements is creating a viability gap that is too large to bridge. 

“Without flexibility, fewer sites will come forward, and those that do will take longer to deliver — which only adds to the supply challenge.”

Alastair Wood, head of Scotland planning at Savills, said: “The ambition behind NPF4 is clear, but in practice the system is struggling to respond at the pace required to address Scotland’s housing emergency. 

“The lack of up-to-date Local Development Plans, combined with increased policy complexity, is leading to delays and uncertainty – particularly for sites that could contribute to housing supply in the short term. 

“A more flexible and proportionate approach to decision-making, particularly on viable and deliverable sites, will be essential if we are to accelerate housing delivery.”

Urban sites faced extra problems with high construction costs, skills shortages and policy requirements limiting developer appetite, especially for flatted schemes. 

Urban land values fell by more than 10% annually to Q1 2026.

Savills recommended greater flexibility on affordable housing and developer contributions, reintroducing a presumption in favour of sustainable development on non-allocated land, faster planning decisions on allocated and brownfield sites, targeted infrastructure funding, remediation support and wider use of masterplan consent areas.

Additionally, Savills noted that while Scotland was not destined for long-term under-delivery, the window for intervention was narrowing.

The proposed national delivery body, More Homes Scotland, and targeted funding offered some optimism. 

However, Savills warned that without action on viability and planning barriers, Scotland’s housing shortfall would continue to grow.

The Scottish Government recently introduced the £100m First Homes Fund, giving up to £10,000 support for first-time buyers (FTBs). 

Savills said this was positive for demand but warned supply remained the problem.

Carole Mackie, head of residential development sales at Savills Scotland, said: “Despite the shortages in supply, what we are seeing in the new homes market is a healthy demand for when new launches do occur, when priced at an acceptable level. 

“The introduction of the First Homes Fund is one that we welcome and we hope will provide a much-needed stimulus to a market that has had many challenges over the last couple of years.”

Choudhry said: “There is still strong underlying demand for housing across Scotland, and the industry is ready to deliver. 

“But we need a system that prioritises deliverability and reflects the realities of today’s market. 

“With the right interventions – and a willingness to take a pragmatic approach – Scotland can turn planning permissions into completed homes. The opportunity is there, but action is needed now.”