Local Housing Strategy: guidance 2026

Housing and economy

Housing of the right type in the right place can promote inclusive economic growth, creating jobs, benefitting local supply chains and positively impacting on health and wellbeing and social co-benefits.

It is vital that there is strong collaboration between local authority housing and economic development officials to ensure close joint working in support of housing and economic ambitions.

National Strategy for Economic Transformation

The National Strategy for Economic Transformation contains bold and ambitious actions to deliver economic prosperity for all Scotland’s people and places. It sets out the priorities for Scotland’s economy as well as the actions needed to maximise the opportunities over the next decade to achieve the Scottish Government’s vision of a wellbeing economy.

As outlined in the National Strategy for Economic Transformation, the following strategies are all driven by a determination to create and sustain a resilient national infrastructure that can support a high-productivity economy

• Housing to 2040
• National Infrastructure Mission
• Infrastructure Investment Plan
• National Transport Strategy
• Scotland’s Digital Strategy
• The Strategic Framework for a Cyber-Resilient Scotland

The second annual progress report of the National Strategy for Economic Transformation highlighted the importance of increasing housing supply as a key enabler of Scotland’s economic transformation. The National Strategy for Economic Transformation Board recommending that housing be a key economic priority going forward.

Housing to 2040 highlights the importance of housing’s contribution to economic growth and recognises that housing means investment in construction, bringing money into our economy and supporting jobs. It also recognises that social housing providers are key players in the national and local economy, with an economic impact far beyond the people they house.

Regional Economic Partnerships

Regional Economic Partnerships are collaborations between local government, the private sector, education and skills providers, enterprise and skills agencies, and the third sector. They bring together regional interests, focussing and aligning resources, sharing knowledge, and identifying new joined-up plans to accelerate inclusive economic growth at a local, regional, and national level.

In developing a LHS, we would expect it to inform and be informed by the work of the Regional Economic Partnership and to ensure that key economic interests, (from enterprise agencies, developers, employers) are engaged in the development of a LHS. Local authorities will also wish to engage with Regional Economic Partnerships in the development of their HNDAs including consideration of any economic projections.

Green Industrial Strategy

As outlined in the Green Industrial Strategy, it is important that housing and the infrastructure required to support it are planned jointly and effectively this includes housing in easy reach of new and adapting centres of green growth.

City Region Deals

City Region Deals are designed to bring about long-term strategic approaches to improving regional economies, aiming to help harness additional investment, create new jobs and accelerate inclusive economic growth. There are a number of City Region Deals and Regional Growth Deals which are packages of funding agreed between the Scottish Government, the UK Government and local partners.

Local authorities are encouraged to consider how any specific housing commitments within these funding packages are contributing to the delivery of LHS objectives.

Summary of areas expected to be included in LHS

a. evidence of engagement with local authority economic development officials and with key economic interests such as enterprise agencies, developers, employers in the development of the LHS.

b. where relevant, a summary of specific housing commitments included within City Region Deals including progress achieved, and details of plans by a local authority to deliver these.

Community Wealth Building

The Community Empowerment Act 2015 places a requirement on Community Planning Partnerships to prioritise outcomes for localities. The Act embeds the principle of working with communities to ensure development and regeneration activities meet the needs of the community and maintains community networks.

Community Wealth Building is designed to harness the economic leverage of local ‘anchor’ organisations to tackle long standing systematic challenges and structural inequalities within our communities. Examples of anchor organisations are:

• local council
• health
• universities and colleges
• housing associations
• large local private sector employers

Local authorities should be aware that the Community Wealth Building Bill was passed by the Scottish Parliament in February 2026 and is awaiting royal assent. The provisions in the bill will seek to ensure consistent implementation of the community wealth building model of economic development across Scotland and address economic and wealth inequality by supporting the retention of more wealth in local and regional economies.

The delivery of affordable housing has strong links to community wealth building. Affordable housing providers, including local authorities, registered social landlords, rural housing enablers and communities delivering homes play a key role in local economies, with an economic impact beyond the homes they provide.

There are examples of projects and case studies demonstrating a community wealth building approach on the website for Scotland's Centre for Regional Inclusive Growth and local authorities are encouraged to engage with colleagues to identify if a community wealth building strategy has been previously been prepared or is being prepared.

Summary of areas expected to be included in LHS

a. a summary setting out how housing delivery and housing related services is contributing to community wealth building in the local area.