Highland Council enhances delivery on the Highland Housing Challenge

14th May 2026

The Highland Council will meet on Thursday, 14 May and on the agenda for discussion is a report on the Highland Housing Challenge.

The Highland Housing Challenge was declared in June 2024, with a target of 24,000 new homes by 2034. Around 9,000 households are currently on the Highland Housing Register.

These infographics give a snapshot of the various practical and deliverable steps the Council is taking to help people live, work and thrive across Highland.

Tune in on Thursday, 14 May to hear the discussion.

The report, Highland Housing Challenge Update, presented to The Highland Council on 14 May 2026, sets out how the council and its partners plan to tackle the growing housing shortage across the Highlands.

Main Message

The council says the housing crisis is now one of the biggest barriers to:

economic growth,
attracting workers,
preventing depopulation,
supporting public services,
and keeping communities sustainable.

The “Highland Housing Challenge” was first declared in 2024 because of rapidly rising demand linked to major economic developments including renewable energy, ports, construction and infrastructure projects.

The report says solving the crisis requires action in three key areas:

increasing land availability,
increasing finance for housing,
increasing developer and construction capacity.
Key Figures

The report highlights the scale of the problem:

8,826 households are currently on the Highland Housing Register.
Homelessness presentations are continuing to rise.
Only 880 homes were completed across all tenures in 2025/26, down from 1,000 the previous year.
There are 2,466 long-term empty homes in Highland — the highest number of any Scottish local authority.
41% of those empty homes have been vacant for more than three years.

The council says existing supply is nowhere near enough to meet current and future demand.

Three Major New Measures
1. Empty Homes Challenge Fund

The council is launching a £1 million fund to help bring long-term empty properties back into use.

Grants Available
Up to £25,000 in urban areas.
Up to £30,000 in rural areas.
Conditions

Owners receiving grants must:

rent properties out for at least five years at affordable or mid-market rents, or
live in them as a main residence for five years.

The scheme is aimed particularly at:

affordable housing,
key worker accommodation,
and rural regeneration.

The fund is expected to launch by the end of May 2026.

2. New Mid-Market Rent Housing Company

The council is developing a new arm’s-length housing organisation called Highland Mid-Market Homes.

This would provide housing for people who:

earn too much for social housing,
but cannot afford high private rents or buy a home.

The report says this is especially important because:

private rents are extremely high,
holiday lets have reduced availability,
and key workers are struggling to find homes.

The council hopes the new organisation could begin operating from April 2027.

3. Faster Planning Through Masterplan Consent Areas (MCAs)

The council wants to speed up housing development using new planning powers called Masterplan Consent Areas.

Potential MCA areas include:

Essich near Inverness,
Ardersier,
and Embo.

Under the MCA system:

communities, developers and the council jointly create a masterplan,
and developments matching the agreed plan can proceed without needing separate planning permission each time.

The council says this could significantly accelerate housing delivery.

Following public consultation, the proposed developments have already been reduced in scale in response to local concerns.

Major Funding Commitments

The report highlights major housing investment already secured:

Highland currently has a £40 million affordable housing programme.
The Scottish Government has agreed a four-year affordable housing allocation worth £209.4 million for Highland.

The council says this provides greater certainty for long-term building plans.

Wider Economic Concerns

A major theme throughout the report is that the housing shortage is now threatening Highland’s wider economy.

The council warns that failure to increase housing supply could:

restrict economic growth,
worsen labour shortages,
push up prices further,
increase homelessness,
and accelerate depopulation in rural areas.

The report repeatedly stresses that housing shortages are affecting:

renewable energy developments,
construction projects,
public sector recruitment,
healthcare,
and education staffing.
Overall Tone of the Report

The overall tone is unusually urgent for a council document.

It presents the housing shortage not simply as a social issue, but as a strategic economic emergency for the Highlands. The council argues that without large-scale intervention across public and private sectors, Highland could struggle to sustain both economic growth and existing communities.

Read the full paper HERE

The full agenda at https://www.highland.gov.uk/meetings/meeting/5339/highland-council

Webcast of the meeting on 14 May 2026
The meetings remain online for up to one year.