Responding to the Scottish Government’s consultation on Accelerating home building – incentives and penalties to speed up housing delivery, which ended today, the professional body said it welcomed efforts to address sites where planning permission has been granted but development has stalled. However, it stressed that any new measures must sit within a wider overhaul of Scotland’s housing delivery system.

Scotland is currently failing to build enough homes across all tenures to meet need, CIH Scotland noted, contributing to record levels of homelessness and rising use of temporary accommodation.

On proposals to introduce tax reliefs to encourage faster build‑out, CIH Scotland said it was “unsure” whether such incentives would be effective, arguing that they risk reducing public revenues without meaningfully shifting developer behaviour.

Instead, the organisation suggested that non‑fiscal support, such as guidance, mediation or strategic oversight, may be more impactful. It also pointed to a potential role for the proposed national housing agency, More Homes Scotland, in helping unblock stalled sites.

CIH Scotland also expressed caution over the idea of taxing land that has been allocated or consented for housing but not built out. While acknowledging the need to explore all options, it warned that penalties could deter development or lead to higher costs being passed on to buyers and tenants.

If ministers pursue this route, CIH said, any tax would require clear guidance, exemptions and a targeted approach focused on sites where delays are demonstrably caused by owners or developers rather than external factors such as inflation, skills shortages or supply chain disruption.

Any revenue raised, it added, should be reinvested directly into housing supply, whether through affordable housing subsidies, infrastructure investment or land remediation.

CIH Scotland backed proposals to introduce powers for reporting on development progress and intervening where build‑out is unreasonably slow.

Closer monitoring could help identify blockages and provide a basis for proportionate intervention, the organisation said, but only if local authorities are properly resourced to carry out the work. Any intervention powers would need to be underpinned by clear, consistently applied guidance that recognises the varied factors influencing delivery across different sites.

CIH Scotland also encouraged the government to consider supportive approaches alongside penalties. It highlighted the UK Government’s New Homes Accelerator Programme, credited with unblocking 125,000 homes to date, as an example of how collaboration between government, agencies, local authorities and developers can speed up delivery.

On proposals to amend the development hierarchy to streamline planning for smaller sites, CIH Scotland again took a cautious stance.

While supportive of efforts to make the planning system more efficient, it warned that small sites often face viability, infrastructure or remediation challenges that cannot be solved through procedural simplification alone. It also raised concerns about any reduction in scrutiny or standards based on site size.

A well‑resourced planning system, CIH Scotland argued, is essential to improving outcomes for all stakeholders, including SME developers.

The consultation also asked whether encouraging more diverse housing outputs across deliverable land could speed up build‑out. CIH Scotland said it supported mixed‑tenure development in principle but cautioned against imposing rigid tenure‑mix requirements.

Drawing on recent sector work in Northern Ireland, CIH highlighted several challenges associated with mixed‑tenure delivery, including inconsistent decision‑making across local authorities, limited understanding of different tenure types, and viability issues in certain markets. Better data to inform local housing needs assessments was identified as a key requirement.

Across all four options, CIH Scotland emphasised that the proposed measures cannot fix Scotland’s slow housing delivery in isolation. Any new incentives or penalties must be aligned with the wider review of housing delivery, including the recommendations of the Housing Finance Taskforce and the creation of More Homes Scotland.

External pressures, such as inflation, material shortages and workforce constraints, also continue to shape the pace of development and must be factored into policy design.

CIH Scotland concluded that while it supports the government’s ambition to accelerate homebuilding, success will depend on a balanced package of incentives, support, monitoring and strategic reform rather than reliance on fiscal levers alone.

For the Scottish Federation of Housing Associations (SFHA), the proposed incentives and penalties for speeding up home building risk distracting from the real issue of funding certainty.

SFHA said the single most important factor in speeding up social and affordable housing delivery is certainty around the Affordable Housing Supply Programme (AHSP) and the availability of grant funding.

The Federation warned that acceleration “is likely to be most successful in a context of certainty and alignment on both funding and policy”, and argued that partnership‑led solutions focused on real‑world delivery challenges would have far greater impact than the measures proposed.

SFHA expressed scepticism about using fiscal levers to influence build‑out rates, warning that penalties could deter development or undermine other policy priorities — including the need to raise funds for the national Cladding Remediation Programme.

The organisation said the suggested measures were unlikely to address the typical causes of slow progression on sites.

While acknowledging that reporting requirements could help map delivery and identify issues, SFHA cautioned that additional monitoring could place a significant administrative burden on both developers and local authorities.

Any new system, it said, would also need to reflect the Scottish Housing Regulator’s existing oversight of RSL development activity.

SFHA backed proposals to reduce costs and barriers for SME developers, including changes to the development hierarchy. However, it said these steps would not resolve the broader challenges SMEs face.

The federation argued that upfront funding for feasibility and remediation would have a more meaningful impact by de‑risking sites for both RSLs and smaller builders. It also called for a review of certain policy requirements — regardless of site size — to lower costs and improve viability.

Encouraging more diverse housing outputs on sites could support affordable housing delivery, SFHA said, but only if RSLs are engaged early and meaningfully.

Any new requirement must balance the need for scale and speed with the need to deliver “the right homes in the right places”. SFHA also warned against rigid national requirements that fail to reflect local needs or contexts.

How the Scottish planning system is holding back housebuilding

While the consultation focuses on issues with housing delivery, a new report by planning and development consultancy Lichfields has concluded that the government might not be looking at this problem in the right way.

Housebuilding has dropped from a recent high of 25,000 starts in 2019 to 16,000 in 2024, but, as the report highlights, the 2020s have also seen a decline in residential permissions themselves. In the absence of a significant uptick in the number of homes being permitted, Lichfields predicts that the issue of delivery is likely to get significantly worse.

‘Misallocating growth?’ looks at the conditions contributing to the recent decline in planning consents, and particularly the role of recent changes in worsening the conditions for housebuilding.