To work out where delivering homes was financially viable for developers, we modelled the ‘all-in’ cost (i.e. factoring in land, build costs, planning obligations and required margin) of delivering a new 1,100 square foot home in each postcode district in Scotland, and compared this to an estimated sale price based on average upper quartile pricing over the past twelve months.

We found that across Scotland, nearly one in four postcode districts (24%) were no longer viable to deliver homes in (excluding Eilean an Iar and Shetland Isles, which have particular reasons for difficulty of delivery). Amongst the councils with the  most limited viability were Dumfries and Galloway and South Ayrshire - areas where new new build sales prices are not sufficient to support housebuilding in our model.

A further twelve councils had at least one area that was unviable using our model. In total. 20 authorities had at least one postcode district where it is unviable to deliver homes.

Using our modelling, most urban areas performed well, including Glasgow and Edinburgh. This reflects the higher values per square foot achieved in these cities, but does not account for the likely smaller size of properties being delivered, nor the additional costs of delivering more high-rise typologies or the greater challenges of brownfield development, discussed above.

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