Scotland’s housebuilders have warned the new SNP and Green Housing Bill risks "serious unintended consequences" amid concerns of investors walking away from funding homes in Scotland.

The body that represents most of Scotland’s housebuilders said "levels of existing housing need in Scotland are more complex and much higher than is currently being accounted for".

The study released before the Housing Bill was published found 28% of Scottish households, almost 700,000, currently have some form of housing need, including overcrowded households and those in need of affordable housing.

The study by Rettie and The Diffley Partnership was commissioned by Homes for Scotland, which has on its board key figures including Doug McLeod, Scotland director for Barratt Homes, Innes Smith, chief executive of Springfield Properties, and Janice Russell, managing director of McTaggart Construction.

The Herald: It was estimated £2.5 billion worth of housing investment was going to England and Wales after initial rent controls in September 2022It was estimated £2.5 billion worth of housing investment was going to England and Wales after initial rent controls in September 2022 (Image: Getty Images)

Jane Wood, chief executive of Homes for Scotland, said: "In the context of Scotland’s chronic undersupply of homes, 693,000 households in some form of housing need, recent savage funding cuts and the dire statistics underlining the depth of the country’s housing emergency, it is unlikely this Bill will deliver the urgent action required to increase the number of much-needed homes that are required across all tenures."

She raised concerns over a lack of a fast-track option for new homes in the Bill.

"There is nothing to support the under-resourced planning system which takes over 62 weeks to process a major housing application or improve the overall policy and regulatory environment which currently serves to hamper the delivery of new homes," Ms Wood added.

"It could also have serious unintended consequences given that the rent controls introduced in 2022 have resulted in investment in new homes being diverted to other parts of the UK, while rents here continue to spiral.

"We welcome innovative thinking and evidenced policies that will make a positive impact on the housing shortage. Unfortunately, this Bill addresses neither."

Remember, this column highlighted how the Scottish Property Federation, which represents the views of real estate industry professionals, estimated £2.5 billion was going to England and Wales after initial rent controls in September 2022.

READ MORE: Anger as SNP, Green homes law does ‘incalculable damage’ to economy

Aditi Jehangir, of Living Rent union, said earlier that the Bill “includes key measures that we have been fighting for such as rent controls that apply between tenancy, the ability to cap increases at 0%, rights for joint tenants to leave and the right to have pets and redecorate”.

A Scottish Government spokesperson said: “The Scottish Government has led the UK in housing by delivering more than 128,000 affordable homes since 2007, over 90,000 of which were for social rent, including over 24,000 council homes.

“Tenants’ rights in Scotland continue to be strongest in the UK. Our emergency legislation capped most in-tenancy rent increases, protecting tenants across Scotland from the worst impacts of the cost of living crisis. Now, the system of checking rent rises, where a tenant thinks an increase is too high, has been adjusted helping to make sure increases are more manageable following the ending of the cap.

“The Housing Bill sets out our next steps on the path towards a fairer, well-regulated private rented sector. We will continue to work with stakeholders across landlord, tenant and investor groups to understand their perspectives.”

In our Business HQ Monthly supplement, business editor Ian McConnell reveals Scottish business leaders overwhelmingly believe Brexit has hindered the economy north of the Border. The poll by The Herald and the Institute of Directors in Scotland also reveals business leaders think the Scottish Government is doing a worse job on the economy than the UK Government, while Holyrood is not correct to use its devolved powers to levy greater income tax on higher earners.

Also in the supplement, deputy business editor Scott Wright turns the focus on a historic Glasgow jeweller that is putting the sparkle into the high street with a £20m investment.

Plus, meet the family-owned stamp shop where “no one is second class” in Kristy Dorsey’s interview.