This month with the political temperature rising north and south of the border and with at least one election imminent we write an open letter to the incoming administrations, regardless of their political colours, with suggestions on how to fix a housing market no longer serving the population or the economy.
Dear Future UK and Scottish Governments,
Housing, as you know, is a pivotal issue in the electoral arena. This is no surprise, given its historical role in leading the country into and out of economic downturns. With a UK election anticipated this Autumn and a Scottish election due in Spring 2026 (and potentially sooner given the current turmoil at Holyrood) we wanted to highlight why we believe a coherent plan of action for the housing sector is essential. That it could also be a vote winner will we hope ensure that you give our suggestions proper consideration.
The Background
The economic picture is now slowly improving and there have been modest increases in house prices and mortgage approvals. It is however clear to us here at maloco mowat parker that without meaningful changes the country will not be able to build our way out of the economic doldrums.
Scotland, like the rest of the UK, is beset by the problems which flow from a fundamental shortage of homes. This shortage looms large relative to homes to buy and homes to rent. Demand greatly exceeds supply pushing up prices and leading to affordability challenges which in turn is impacting both Scotland’s and the UK’s GDP. Housing has long been a pressing social issue. Many can no longer afford to live where they work and there is no work where they can afford to live. The right to live in a warm, dry, safe home ought to be a given in a country as affluent as the UK and yet it is not. Tangible action to meaningfully address the issue has sadly been lacking for years. What is needed now is a radical yet credible, costed plan from each political party. Plans which tackle the issue with a long-term strategy rather than short-term populist fixes almost always backfire and harm further those they intend to benefit.
The current Government target of 300,000 new homes per year simply echoes the ambitions of every administration since 2004. Despite twenty years of stagnant ambition this target has not once been met. France by contrast has outpaced Scotland and the UK as a whole in its rate of new home construction.
The root cause of the housing crisis is multifaceted. Reasons include an over-reliance on major UK housebuilders, a politically aligned planning system which disincentivizes council-led social housing, a net loss of social housing due to sales under the Right to Buy scheme and a decrease in construction workers post-Brexit. Without addressing these systemic issues, we cannot hope to resolve the affordability crisis gripping Scotland and in particular London as the engine room of the UK economy.
Get SME housebuilders building again.
Empowering small and medium sized builders is a crucial component of the solution. Before the 2008 financial crisis, small developers built 40% of our homes. Today that figure is 15%. Encouraging smaller scale developments garner better community backing and diversify the housing supply. In addition, developers could be awarded fully permissive planning permission for brownfield sites of less than 2.5 hectares.
Boost skilled labour in construction
The shortage of skilled labour exacerbates our problems. The incoming Governments must prioritize creating homegrown jobs to reduce reliance on overseas workers. The re-setting of our relationship with Europe also merits consideration.
Fix the planning system
Reforming the planning systems north and south of the border is imperative. The current systems are riddled with conflicts of interest which hinder progress. Independent, streamlined decision making is needed to eliminate costly delays which are ultimately passed on to consumers.
Prioritise social housing
Social housing deserves far greater attention than afforded it in recent years. Consider empowering councils to acquire land through compulsory purchase orders to address “land banking” by builders. Set ambitious targets for social housing to alleviate pressure on the private sector.
Alleviate restrictions on conversions and brownfield sites
It’s time to incentivise developers to build on brownfield land. Support the automatic granting of planning permission for sites with plans meeting green, sustainable minimum requirements. Let’s prioritise the use of existing buildings over new constructions, and advocate for the lifting of restrictions on conversion projects. Actively push for sustainable development and contribute to a lower carbon future.
Lenders have an important part to play.
Developments require capital and smaller developers will need to seek finance from challenger bank or non-bank lenders able to offer flexible terms and evaluate risk in changing market conditions. There is merit we believe in Government supporting by way of underwriting at least some of the borrowing of well-capitalised developers with creative strategies to bring the much-needed new homes to market.
In Conclusion
It is crucial to acknowledge that addressing the challenges Scotland and the wider UK currently faces requires a sustained and committed effort. We urge you to stand firm in your commitment, even if it means facing temporary unpopularity. Embrace a pro-growth agenda and effectively communicate the repercussions of the supply-demand imbalance on home affordability. To ensure a prosperous future, we implore you to take decisive action, leading us all toward a balanced and sustainable housing market.
If the will exists there is the potential for long-term growth, but decisive action is needed to ensure prosperity for both Scotland and the UK in the years to come.
Yours sincerely
maloco mowat parker
for and on behalf homeowners and renters across Scotland and the UK
