In 2007, the newly elected Scottish Government pledged to increase the number of new homes built per year to 35,000, which it described as “achievable and necessary”.

However, Housing the Future: How Scotland Can Build Again, published today by the Scottish Fabian Society, found that 250,000 fewer homes have been built than pledged.

Rather than increasing, the report found that annual housebuilding is down 26% since 2007-08, with just 19,177 homes completed in 2024–25 – from a peak of 25,788 in 2007–08. Modelling shows this leaves a total shortfall of a quarter of a million homes against the 2007 pledge – equivalent to the population of Edinburgh or twice the size of Aberdeen.

The report warns that the Scottish Government is set to miss its revised targets. Even if its revised target of a 10% annual increase in overall housebuilding were achieved, delivery would remain below 2007–08 levels. And meeting its pledge to deliver 110,000 affordable homes by 2032 requires 11,000 per year, but just 7,400 were completed in 2024–25.

This is caused by “unambitious, restrictive and counterproductive” policy choices, the report claims. Private sector housebuilding has been constrained, with the number of homes started down 39% since 2007. Planning permissions fell from 5,600 in 2012–13 to 3,289 in 2024–25 – a 41% drop.

Between 2019 and 2025, regulation has added around £7,000 onto building costs and, in the next parliament, the Scottish Passivhaus standard requirement will add up to 8% onto the cost of each home.

This has led to the lowest levels of housebuilding since the end of the Second World War. And 9 out of the 10 worst years for housing completions have been in the last 19 years.

This failure is a significant contributor to the housing emergency in Scotland, the study argues. In the last decade, average property prices have risen by 47% and average monthly private rents by 51%.

More than 190,000 people are pushed into poverty because of their high housing costs, the report finds – including 35,000 children. YouGov polling, carried out for the report, finds that when asked how much they trust the SNP and First Minister on housing, 58% of respondents said ‘not very much’ or ‘not at all’; 28% said ‘a great deal’ or ‘a fair amount’.

The report sets out a blueprint for housing in Scotland, including a fresh target of 350,000 homes by 2036. Given the current situation, this will require an ambitious policy change.

Recommendations to achieve this include: 

• reforming the planning system to restore a presumption in favour of sustainable development and simple decision making in places where development already exists; and allowing councils to set planning fees to recover costs.
• reshaping affordable and social housing funding by introducing a five-year, inflation-linked settlement for the Affordable Housing Supply Programme (£6.5bn in real terms over five years), with a further five-year indicative settlement, and creating a £500m Social Housing Quality Fund over ten years.
• establishing More Homes Scotland, with an explicit purpose to unlock housebuilding and significant new powers over low-cost lending and compulsory purchase
• introducing a New Homes Standard for a decade to give developers long-term certainty and end the quality-versus-quantity trade-off that increases costs and prevents homes from getting built.
• increasing rural, remote and island housing supply through a statutory ‘right to build’ for small community schemes, a single permanent ‘Building Rural and Island Housing Fund’ worth £20m per year, and support for self-builders. 

Katherine Sangster, director of the Scottish Fabian Society, said: “Housing is devolved – Ministers can determine planning policy, funding for social housing, finance for builders and developers, and new housing standards. They have the powers and tools to influence the building of homes, and ultimately the cost of housing. But action over the past 19 years has not matched the scale of the emergency. And often it has actively contributed to it.

“Ultimately, the people of Scotland are paying the price of a political failure to build enough homes.”

Ben Cooper, head of the Fabian Housing Centre, said: “Housing is rapidly rising up the political agenda, as Scotland has seen the worst housebuilding slump since the Second World War. This failure is a major contributor to the housing emergency and high housing costs. The public expects bold action from the next Scottish Government.

“A target of 350,000 new homes over the next decade is an ambitious goal to transform Scotland. Bold planning reform to get the private and public sector building, a multi-year commitment to funding social housing, and steps to deliver more homes in rural Scotland, are necessary to achieve this.”