Here in Scotland, housing is too often discussed in the context of crisis and emergency rather than opportunity.
I write this with a clear understanding of why these labels have necessarily been applied, but also with a strong belief that addressing our housing shortage requires a healthy dose of inspiration that is sadly missing from our current discourse.
How housing investment supports Scotland’s economy
Real estate is the world’s largest investment asset class and housing accounts for a significant part of this.
Embracing an all-tenure approach to growing our housing stock is a signal to the market, welcoming the investment we need.
It also provides a foundation for economic growth by enabling workforce mobility, supply chain spending and skills development.
Better housing produces better life outcomes, a stronger economy and a fairer society
— Mark Munro
For the Scottish National Investment Bank (“the Bank”), housing sits at the intersection of everything we exist to do: tackling poverty and place-based inequality, driving economic growth, and building a portfolio that delivers returns for Scotland over the long term.
Better housing produces better life outcomes and those outcomes, multiplied across communities, produce a stronger economy and a fairer society.
Importantly, a thriving housing economy doesn’t depend on a single model. What matters is high-quality, warm, safe and sustainable stock in the places people want to live.
Why Scotland needs a stable housing construction pipeline
The case for more capital is stark. New build starts and completions across all tenures have fallen, and our existing housing stock is ageing. There is a gap that commercial capital alone hasn’t been able to fill.
That gap is compounded by a demographic cliff-edge in our construction workforce, where the average worker is in their fifties.
Decades of boom-and-bust cycles have pushed apprentices out of the industry almost as soon as they qualify. Getting more people into the trade and keeping them there requires a long-term, stable pipeline of public and commercially financed projects.
How public and private capital can support housing delivery
Recent changes to housing legislation have brought some welcome stability, creating opportunity for investors to engage with greater confidence.
However, viability pressures remain, strengthening the case for public and private capital to work together, targeting the areas where the market still needs support.
As a development bank, we have one foot in the private sector and one in the public sector. Our role is unique and critically needed, helping investors gain the confidence they need to commit to Scottish projects, and in turn support the long-term growth of our economy and the development of opportunities for Scots.
Housing as a long-term investment opportunity for Scotland
At the Bank, we also view housing as an important asset to add to our portfolio. By investing in an asset class with often more predictable returns, backed by physical assets, we can deliver on our mandated missions, while balancing the risk profile across our wider portfolio.
That resilience provides a natural platform from which to attract third-party capital, extending our balance sheet and multiplying our impact. Scotland has a compelling story for investors: we have an ageing housing stock in need of upgrading, a growing delivery track record, and significant untapped demand. Opportunity lies in that gap between demand and delivery, so it is time to shift the narrative around our housing ambitions from one of crisis to one of opportunity.
Growing our housing stock and our economy will take time, but, as a patient investor which gives equal weight to commercial returns, social impact, and long-term economic growth, we want the market to be as inspired as we are by the opportunities.
FAQs
How does housing investment support Scotland’s economy?
Growing and improving housing stock supports workforce mobility, supply chain spending and skills development, alongside better living conditions.
What is an all-tenure approach to housing?
It means supporting housing across different ownership and rental models to meet a wider range of needs and attract investment.
What role does the Scottish National Investment Bank play in housing?
The Bank invests patient capital to support housing delivery, tackle place-based inequality and attract private investment while seeking long-term commercial returns.
Why does construction need a stable pipeline of housing projects?
A sustained pipeline helps businesses recruit, train and retain workers, strengthening the industry’s capacity to deliver more homes.
Mark Munro is chief investment officer at the Scottish National Investment Bank
Partner Content in association with the Scottish National Investment Bank