HOMES for Scotland (HFS) has published a new report calling for a stronger, shared, understanding of development viability and its critical role in delivering the homes Scotland needs.
Development Viability – Housing sets out the commercial realities that determine whether land allocated for housing can realistically be brought forward. The document highlights how rising costs, infrastructure requirements, planning obligations, policy expectations and market conditions can all affect whether sites are capable of being delivered.
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. 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.
A site is only viable when the income generated from development is sufficient to cover the full costs of delivery which include an acceptable land value, construction, finance, professional fees, developer contributions, infrastructure, policy requirements, and an appropriate return, HFS explained.
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.
Kevin Murphy, Director of planning at Homes for Scotland, said, “Scotland’s housing emergency will not be resolved unless there is a stronger understanding of the commercial realities of development. This is essential to turn housing ambitions into much-needed homes on the ground. High expectations are one thing but these must be deliverable. If 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’t make financial sense to build them – whether in the private or social sectors.”
“We 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.”
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.
Furthermore, 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.
HFS added 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.
Kevin Murphy continued, “A deliverable housing land pipeline depends not only on identifying land, but on ensuring sites can attract investment and be built out in practice.
“That means clarity, proportionality and early consideration of viability must be central to how Scotland plans for new homes across all tenures.”
