Scotland has been undergoing a significant change of direction over the last three years about where housebuilding should be located and what kind of development will be supported.

Key to this is the National Planning Framework 4. Introduced in 2023, the consequences of the new framework are now beginning to be felt, as councils prepare new Local Development Plans (LDPs) and new rules begin to embed themselves into the planning and development cycle. For residential development, there are three principles that will prove particularly important:

• First, councils should have adopted a new, NPF4-compliant LDP, covering the next ten years of development, by no later than May 2028. It is already clear that most councils will not meet this deadline.
• Second, new housing should as a rule only occur on new housing allocated within Local Development Plans. This change, backed by recent decisions at the Court of Session, essentially means that sites that are not allocated for new housing are unlikely to gain planning permission, even for housing in areas of where there is a critical need to boost housing supply or where it is known that new Local Development Plans will not be in place by May 2028.
• The result is an increased demand for strategic housing land, as developers and landowners must obtain or option their sites and successfully promote it to receive an allocation within the ongoing Local Development Plan reviews, or risk being effectively shut out of the development land market for ten years.
• Third, development should focus on previously developed sites as part of a brownfield-first approach, with greenfield sites playing a minimal role in housing delivery. Due to higher costs, this will likely require new development to be at higher densities and pricing to ensure viability.

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Combined, these changes are already having a major impact on residential housing supply in Scotland which could continue over the next decade. They also raise several questions about whether such an approach will help deliver the homes Scotland needs. Key questions remain:

• Can robust Local Development Plans be ready by 2028 or, where this is not possible, with minimal further delay?
• Can brownfield sites really deliver enough homes to meet housing need?
• Will relying only on sites allocated within the local plan-making process deliver enough homes, or leave supply at risk of disruption?
• Finally, how will these changes affect the wider viability of development, which is already holding back housebuilding in parts of Scotland?

Residential development in Scotland is at an inflection point. There is reason for cautious optimism in the new homes sales market, with rising site visitors and stable sales rates. But applications and completions of new homes have fallen two years in a row, and many local authorities are now behind schedule for adopting new local plans. Whether NPF4 and the planning system can enable more housebuilding and unlock development activity is therefore critical to whether Scotland can make progress on tackling the housing emergency, and delivering the homes it needs.

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