Build-to-Rent offers rare bright spot as Scotland’s housing delivery slows

Scotland’s housing delivery crisis deepened in 2025 as new home completions fell by 13% to 17,336 homes, according to new research from Savills, raising fresh concerns about the widening gap between housing need and supply.

The figure represents the second-lowest annual completion total since 2016 and comes despite a modest recovery in planning applications, suggesting that more sites are entering the system but failing to progress to construction.

Savills argues that a combination of planning constraints, rising construction costs and viability pressures is creating increasingly difficult conditions for residential development across Scotland.

According to the report, many consented sites are now stalling because escalating build costs, infrastructure requirements and fixed planning obligations have eroded development viability.

Faisal Choudhry, head of residential research in Scotland at Savills, said Scotland was facing a clear mismatch between housing demand and delivery at a time when the country remains in a declared housing emergency.

The report also highlights growing pressures within the planning system. Delays to Local Development Plans and challenges associated with implementing National Planning Framework 4 (NPF4) are creating additional uncertainty for developers seeking to bring forward new housing sites.

Urban development has been particularly affected, with high-rise and flatted schemes facing increasing viability challenges. Savills notes that urban land values have fallen by more than 10% year-on-year to the first quarter of 2026, further impacting development activity.

However, amid the wider slowdown, the Build-to-Rent sector is emerging as one of the few areas showing positive momentum.

Savills points to the Housing (Scotland) Act 2025, which confirmed that professionally managed Build-to-Rent developments will be exempt from rent controls, as an important factor supporting investor confidence.

The exemption has helped reinforce Scotland's attractiveness to institutional investors at a time when uncertainty elsewhere in the residential market continues to affect development decisions.

While the wider market continues to face viability challenges, the report suggests that Build-to-Rent could play an increasingly important role in delivering new housing supply, particularly in major urban centres where demand for professionally managed rental accommodation remains strong.

Savills is calling for a more flexible and delivery-focused approach to housing policy, including faster planning decisions, targeted infrastructure funding and greater flexibility around affordable housing requirements where viability is constrained.

Ben Brough, head of Scotland development at Savills, said the focus should be on ensuring viable sites can move forward rather than allowing projects to stall.

He said: “This isn’t about lowering standards – it’s about making sure homes actually get built.”

Despite the current challenges, Savills believes strong underlying demand for housing remains across Scotland. However, the report warns that without intervention to address planning delays and development viability, housing delivery is likely to remain below required levels for years to come.

For the residential sector, the findings reinforce a growing divide between policy ambition and development reality, while highlighting Build-to-Rent as one of the few segments continuing to attract investment and support new housing delivery.