The document was published after a separate analysis for ministers warned the
majority of young Scots will be forced to rent by the end of the decade
because they cannot get a mortgage.

Unveiling the strategy, Alex Neil, the Scottish Housing Minister, said: “These
proposals are firmly rooted in financial reality and framed against the
major challenges stemming from the credit crunch and the savage cuts
inflicted by the UK Government.

“Scotland needs many more new houses and to significantly enhance the quality
and sustainability of our existing housing stock.”

The paper, titled Homes Fit for the 21st Century, listed a series of
priorities for the country’s housing stock over the next decade but
concluded the “most significant” is catering for a rise in the number of
households.

There were only 11,188 completed homes built in the private sector in 2009/10
compared to 21,656 two years previously.

Private house builders and lenders will need to change the way they operate to
take account of buyers struggling to get mortgages, it said.

Some are already developing shared equity and rent-to-buy schemes, and the
paper predicted these will become much more common in future as people
cannot afford deposits, which now average 23 per cent of the total price.

There is a “clear rationale” for the Scottish Executive to encourage such
schemes by subsiding them, but the blueprint admitted public spending cuts
will limit the amount of help that can be offered.

Currently, the owners of properties that have been empty for more than six
months pay between half and 90 per cent of normal council tax payments,
depending on the local authority area, but the paper suggested increasing
this to 100 per cent.

The proceeds could be topped up to meet a new SNP election pledge to build
5,000 council houses over the term of the next parliament.

Michael Levack, chief executive of the Scottish Building Federation, welcomed
the minister’s efforts but added: “I am not convinced this is the right
mechanism to fund an expansion of new affordable housing. Surely, these
monies would be better used to refurbish properties that have lain vacant so
that more can be reoccupied?”

He said the housing budget faces cuts of £94 million next year and warned: “An
additional 800 new homes per year – however welcome they may be – will make
limited inroads to the current major shortfall in Scotland’s housing stock.”