New data from the Scottish government reveals a significant decline in housebuilding activity, with starts down 5% and completions falling by 8% in the year ending September 2025 compared to the previous year. This downturn poses challenges for landlords and agents as the supply of new homes, including affordable housing, fails to meet demand, potentially impacting rental market dynamics and investment opportunities.

Sharp decline in housebuilding activity across Scotland

According to official figures, total housebuilding in Scotland is in steep decline. In the year ending September 2025, 18,347 homes were completed and 14,846 new builds started. The private sector accounted for 14,225 completions and 11,815 starts, while the social sector delivered 4,122 completions and 3,031 starts.

These numbers represent the lowest levels of private sector completions since 2018 and the lowest starts since 2013. The social housing sector has seen completions fall to their lowest since 2017, with starts at their lowest point since records began in 1997. This downward trend signals a contraction in new housing supply, which may exacerbate existing pressures in the rental market.

Implications for landlords and the rental market

For landlords and letting agents, the reduction in new housing supply could lead to increased demand for existing rental properties, potentially driving up rents and reducing tenant choice. The shortage of affordable homes, in particular, may place additional strain on the social housing sector and push more households into the private rental market.

Scottish Conservative shadow housing secretary Meghan Gallacher MSP criticised the current strategy, stating that the SNP government has failed to address the housing emergency. She warned that proposed rent controls could deter investment, further limiting housing supply and hindering efforts to help families onto the property ladder.

Affordable housing delivery remains insufficient

The Scottish government has pledged to deliver 110,000 affordable homes by 2032, with 70% allocated for social rent. However, only 31,064 affordable homes have been completed to date, 78% of which are for social rent. In the latest year, there were 5,222 approvals, 5,494 starts, and 6,582 completions of affordable homes, but overall delivery has slowed.

Shelter Scotland director Alison Watson highlighted the urgency of accelerating affordable housing delivery, noting that at the halfway point of the current financial year, only 2,528 affordable homes have been completed—25% fewer than the same period in 2024. She emphasised the need for increased investment and alternative delivery methods to meet long-term targets.

Policy challenges and future outlook

The decline in housebuilding activity raises concerns about the effectiveness of current housing policies in Scotland. With homelessness rising and many families in temporary accommodation, the shortage of new homes is a pressing issue. The SNP government’s focus on rent controls has been criticised for potentially discouraging investment in new housing developments.

For landlords, understanding these market conditions is crucial. Reduced new supply may create opportunities for rental income growth but also increases the responsibility to maintain and manage existing properties effectively amid heightened demand.

Supporting landlords through changing market conditions

In response to the evolving housing landscape, the Tenant Landlord Association (TLA) is launching a new Trusted Partners Hub in Q1 2026. This initiative will feature verified and approved service providers to support landlords, tenants, and property management businesses. Legal, trades, insurance, financial, mortgage, tenant screening, and other relevant service providers are encouraged to register their interest to join the hub.