Five disruptions: Can Scotland deliver real housing reform?

At the 2026 World Economic Forum Annual Meeting in Davos, the Prime Minister of Canada, Mark Carney, demonstrated the virtue of calling things as they are. We need that same political virtue here regarding Scotland’s housing sector. It is in crisis, with the Scottish Parliament declaring a national housing emergency in May 2024.

This has been long in the making and is likely to be just as long in resolution. Essentially, we have a continuing polycrisis arising from the growing unaffordability of homes over most of this millennium. The causes lie both in negligible real income growth for the poorest fifth of Scotland’s people, whilst effective policy resources to meet needs have been falling. Add to this the long-term propensity for both house prices and rents to rise well ahead of incomes and prices, and you get a sense of the polycrisis.

We have a ‘moral-political’ issue as we care less about Jock Tamson’s bairns than in the past, and we have growing housing system failures. Today, three-quarters of Scots find their homes through the private market – either by renting or buying. The main forces shaping these markets are the wider economy and policy decisions made at Westminster, including interest rates, financial regulations, and fiscal measures such as wealth taxes. Yet the Scottish Parliament often pursues housing reforms without fully recognising how strongly these UK-level factors influence outcomes. While many of Scotland’s housing policies are innovative and valuable, they are often treated politically as if housing were a self-contained area of Scottish spending. To achieve real change, housing policy must be connected to the broader UK economic and financial context in which it operates.

Scotland’s current housing outcomes – high homelessness rates, near record burdens of rents and mortgage payments, and low and falling home-ownership rates for the under-forties – erode social justice and inclusion. Conditions also significantly impede progress towards net zero and threaten economic stability, make the distributions of post-housing costs, incomes and wealth more unequal. All of this diminishes productivity and growth. Scotland, not just governments, but its institutions, including the RSE, have not given this core socio-economic system the attention it deserves. There is no evidence- informed discussion on the effects of housing, the largest segment of consumption and wealth for the majority of Scots, on Scottish growth and productivity.

Scottish politicians have begun to grasp parts of the problem, though a major diminution in research funding and capacity over the last 20 years has left major questions unanswered. For much of this millennium, Scottish policy efforts have been palliative, dealing with symptoms rather than root causes. That said, the Scottish Government has implemented an Emergency Action Package. With support from two political parties outwith government, further damaging changes to parts of the rental market have been halted and Cabinet Secretary advice has been directed towards dealing with some of the rigidities and ambiguities in the National Planning Framework. The affordable housing budget to 2029 has been raised from 12% to 17% of the Scottish Government Capital Programme.

Making their initial 2026 Scottish Election ‘offers’, the major political parties hint at further marginal budget increases and mostly reassert the palliatives of the past. These will not drive progress to 2030. The offers will not change the housing system, and even enhanced budgets will not, as research suggests, meet more than half of outstanding needs. And these needs will increase significantly as the Scottish population ages faster than across the UK as a whole. Added to this, we have higher disability rates across the age range of people. With the system largely unreformed, and the Scottish Fiscal Commission (Carney-like in its proficient honesty) highlighting falling public capital spending through the next Parliament, there is an increasingly uncertain economic outlook with almost certain low income growth. Clearly, neither the state nor the market will fashion the end to the housing polycrisis. Scottish politicians will have to think and act differently about the housing crisis after the election if Parliament is to salvage matters.

There needs to be a cross-party collaborative approach to system change; fundamental disruptions in how Holyrood ‘does housing’ are needed.

We propose five disruptions:

1. The Parliament must see housing as a key component of how Scotland thrives and deal with challenges of growth as well as decline. Remaking the supply side of the system is about much more than faster municipal planning. We require an industrial strategy for housing that deals with shortages of skilled labour and middle-sized firms, and facilitates a sharp uptick in modular and modern sustainable construction methods. We need to see housing investment-support emanate from Holyrood in strategic packages combined with other infrastructure spending which feeds into regional/local scale spatial strategies for positive change.
2. The second major disruption needs to recognise the local agency limited capacities of non-profit providers. All of Scotland’s parties need to remake and re-emphasise their interests in this area, neglected since the demise of Communities Scotland.
3. A third challenge for the Parliament is its reputation for policy honesty and competence has been diminished through lacking the wit to reform the Council Tax.We need a coherent tax system for the nation’s housing.
4. Fourth, but arguably temporally the first disruption, is the need to move towards devolving budgets for housing and local infrastructures to more regional structures, where they sit closer to economic and other partnerships. This surely makes the vital, long-missing, housing-economy connection.
5. The Scottish Government has proposed establishing More Homes Scotland (rather like Mr Carney’s Build Canada Homes) for take-off in late 2027. Our final disruption, or really a plea, is these needs to be operative by end of 2026, and must have the supply side, not-for-profit sector, and the above-urged governance as core business working together to deliver at least the tangible beginning of the end of the housing emergency. If we do not have the boldness to pursue these actions, the future will be bleak for so many of our people.

Professor Duncan Maclennan, Emeritus Professor of Urban Economics, Urban Studies, University of Glasgow

Catherine Stihler FRSE, Chief Executive Officer, Creative Commons

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