How SME developers can help turn wasted space into habitable homes

We sat down with Steven Clark, Corporate Relationship Director for the Scottish region at Together, to find out how he thinks developers can utilise abandoned spaces to help alleviate the growing housing shortage in Scotland.

“With the Scottish Parliament election just over a year away, it seems inevitable that housing will once again be a hot topic for voters. We’ve seen a year-on-year decline in the number of new builds being compounded by aging existing housing stock. Add in a palpable appetite to buy (Scotland has eight of the top 20 busiest property markets in the UK) and there’s little surprise that demand, competition and prices have all shot up across the country.

An estimated 28% of Scottish households don’t have accommodation that adequately meets their needs, according to research from Homes for Scotland. So, it’s clear that we’re still in the housing emergency announced by the Scottish Government last year.

Many Scots are unable to wait for house building manifesto pledges – so what can developers do to help ease the housing shortage before the ballot boxes open?

Building on brownfield sites

Builders would’ve been buoyed by the news in December’s 2025-26 Housing Budget, reinstating a 56% increase in funding after previous budget cuts. But a big question is; where can builders actually build the houses we need?

A growing trend that we’ve seen at Together is for developers to preserve greenbelt land by building on sites that have previously been developed, known as brownfield sites. For example, these plots of land may have been used by an industry that has now left the area.

Of course, this can mean that the sites often need to be cleaned up to remove left over pollution and debris. However, the Scottish Government and local councils have policies in place to support the clearing of these areas for residential use.

Building on brownfield land has many advantages, such as:

• being easier to get planning permission for
• having existing infrastructure, such as drainage and road access, in place
• being closer to existing communities and facilities
• smaller plots of land are ideal for SME developers looking to build a selected amount of houses rather than a full development.

As part of the Scottish Vacant Land Survey 2023 (the latest edition of the research), it was estimated that there’s 9,111 hectares of vacant or derelict land across the country. The same research suggested that building residential homes was one of the top methods of reclaiming these sites, recouping 66 hectares in 2023.

Restoring and refurbing abandoned buildings

But, we don’t need to build from the ground up to make more habitable homes. Together’s ‘Hidden Gems’ research points to there being over 1.55 million properties around the UK that are either vacant or derelict.

In Scotland, 93,000 properties sit in this category, with a combined property value of £18.5 billion. Together has worked alongside many SME developers that have seen an opportunity in these ‘hidden gem’ properties, buying and refurbishing them to either flip for profit or rent out for a longer-term revenue stream.

Here’s some of the benefits of redeveloping an abandoned building:

• There’s great return on investment potential.
• They’re cheaper to buy than standard properties (but remember that you’ll need to factor in your building costs too).
• They’ll have existing infrastructure such as mains electricity, water and sewerage, and road access.
• They’re often within established communities with local facilities that are attractive to buyers (schools, shops, entertainment and transport links).
• There’s less competition from other buyers.
• They can make excellent HMO opportunities.

As you can see, there’s plenty of potential in these wasted spaces, on top of returning residential real estate to the market. At Together, we’ve committed to lending £500 million to Scotland’s SME developers to help kick start the much needed house building revival.”

Together is a specialist mortgage lender with over 50 years of experience helping personal and commercial finance clients access the funds they need. Their latest report into the residential property market collates exclusive research and surveys with insights from industry experts to ask whether the market is on the road to revival.

Steven Clark is the Corporate Relationship Director covering Scotland for Together. Before joining Together in 2016, Steven accumulated over a decade of experience in the property finance industry, working at Royal Bank of Scotland and Bank of Scotland respectively.

Any property used as security, including your home, may be repossessed if you don’t repay your loan.