Steps to unlock private sector led town centre housing identified in new study
A new Study published today (27 January 2025) highlights the barriers and opportunities facing private sector developers to deliver much-needed town centre housing in Scotland.
The Study, Unlocking Town Centre Living: insights from private sector engagement prepared by Architecture and Design Scotland and infrastructure body, the Scottish Futures Trust, presents feedback from interviews with private sector developers who are active in town centre housing projects.
The Study fills a gap in private sector representation and follows on from a series of town centre living roadshows that attracted significant public sector and community input. A summary video of the 2024 roadshow output can be found here.
The Study’s findings reinforce five themes for the delivery of more housing in town centres:
Leadership and collaboration – strong, supportive and engaged leadership will drive high quality activity across public and private agencies. A nationally aligned policy across Scotland’s councils would increase developers’ confidence. The benefit of having a consistent and pragmatic policy across, and within, councils was identified to address key challenges like parking and heritage conservation.
Holistic planning and placemaking – town centre living projects can deliver multiple knock-on economic, social, health, wellbeing and environmental benefits.
Ensuring residents have access to local health, education, transport and other essential services, alongside well designed public spaces, is critical to attract developers, especially for larger projects.Funding and resources – creative funding models for town centre living projects can make opportunities more attractive to private developers. Many small and medium sized developers reported difficulties in securing finance for town centre living developments, especially in the early stages. Removing or reducing development levies and tax burdens would be an incentive.
Local engagement and partnership – developers use a range of tools to engage with local communities, councils and other stakeholders. Small and medium sized developers can be agile and innovative, but best results are achieved where they work in partnership with councils who can guide, and where appropriate smooth, the consenting journey.
Risk mitigation – developers face additional hurdles in town centre developments which, alongside complex and disjointed planning and approvals processes, create significant barriers to investment. At present, private sector developers are typically active in high value locations. A shared approach to risk and return that reflects the position for public and private sectors could help unlock large-scale developments and deliver high quality housing across more of Scotland’s town centres.
Heather Claridge, director of design at Architecture and Design Scotland said: “The industry leaders involved in the study showed remarkable resilience and an impressive commitment to placemaking and design. Their local knowledge, expertise and ability to navigate complex policy and investment environments, highlights both the challenges and requirements for growth of the town centre living sector.
“This growth, driven by increased partnerships between the private and public sector, as well as utilising the recognised value of design skills in the town centre context, can contribute to healthier, more sustainable and attractive town centres for Scotland’s communities.”
Mhairi Donaghy, associate director at the Scottish Futures Trust said: “The thoughtful and open response from private sector interviewees has given us an increased depth of knowledge that we were lacking in meeting the town centre living agenda.
“The benefits of town centre living are clearly understood and there is real appetite from developers in delivering more homes in more town centres. However, the constraints and barriers are major obstacles, highlighting the key role that the Scottish Government, councils and others have in helping to overcome them.
“The private sector could and should play a bigger role in delivering more homes in our town centres, but they need more support to create the right conditions for investment.”
Kimberley Guthrie, chief officer at Scotland’s Towns Partnership said: “This further insight adds yet more weight to the information shared by the 200-plus people who took part in our Town Centre Living Roadshow last year. It really underpins the economic and social vibrancy that will come from having more people living in our town centres, as part of wider regeneration work.
“The private sector has a huge part to play in this. Greater partnership working – across the private, public and third sectors – will be the key which unlocks future developments in so many places, realising ambitions set out in Scotland’s Town Centre Action Plan. No single sector or organisation has the answer alone. Collaboration is critical.”
David Stewart, policy and practice lead at the Scottish Land Commission said: “This work is vital to understanding the challenges that the private sector faces in delivering new homes in town centres across Scotland. We know from our work on Vacant and Derelict Land that the private sector can play a major role in bringing empty properties back into re-use and revitalising vacant sites, but they need support to deliver these developments.
“This work provides valuable insights on the support needed to animate high streets and provide much needed homes close to shops and other amenities.”
The Study’s findings will further inform the work of the Town Centre Living working group comprising Architecture and Design Scotland, Scottish Futures Trust, Scotland’s Towns Partnership and the Scottish Land Commission.
The working group will present the Study’s findings at the Spring 2025 Town Centre Action Plan Forum, which is jointly chaired by Tom Arthur MSP, Minister for Employment and Investment, and Councillor Gail McGregor, COSLA’s Environment and Economy spokesperson.