Housing completions decline in Scotland

There were 3,744 new build homes completed in Scotland between July and September 2016; an 8% decrease on the same quarter in 2015.

There were 4,322 new build homes started between July and September 2016; 3% more than the same quarter in 2015. This brings the total for the year to end September 2016 to 16,870 which is down by 5% (880 homes) compared to the 17,750 homes started in the previous year.

“I am deeply concerned by today’s figures which confirm the views of my members that it has never been more difficult to start sites and get much needed homes out of the ground,” Nicola Barclay, Chief Executive of trade body Homes for Scotland. “Obviously this continuing flat-lining of total supply is bad news in relation to the jobs and investment builders bring to our economy, but unfortunately those worst affected are the young people and growing families struggling to get on the housing ladder.”

There was also a worrying decline in private sector-led homes. Between July and September 2016, 2,912 private sector-led homes were completed; down 6% on the same quarter in 2015.

There were 3,016 private sector led starts between July and September 2016, down 8% on the same quarter in 2015. This brings the total for the year ending September 2016 to 11,816, which is 14% (1,845 homes) less than the 13,661 starts in the previous year.

The social sector also took a hit, with completions declining 16% between July and September 2016. However, 1,306 social sector homes were started between July and September 2016; 46% higher than the same quarter in 2015.

“Whilst it is good to see an increase in social sector funding and consequent activity, we must recognise that this equates to only a third of homes built, and we therefore need an all-tenure approach to delivery if we are to meet the wide range of housing needs and demands of people across Scotland,” said Barclay.

Gordon Nelson, Director of FMB Scotland, said, “The first nine months of 2016 showed an increase in starts across housing associations and local authorities. However, we want both local authority and housing association builds to be adding to private sector supply – social house building shouldn’t have to compensate for a lack of private house building. Scotland was the only part of the UK to see a fall in the number of new homes completed in 2015/16 compared to 2014/15. To reverse that and begin to fully meet Scotland’s housing need, we need to see all sectors building many more homes than they currently are.

“The Government needs to look at how it can address this weakness in the market. Crucial to this will be how it can enable small and medium-sized (SME) house builders to play a greater role in the housing market and boost their output of new homes. The Government took an important step towards doing this in its survey of Scottish SME house builders last year.

“The responses showed that there are significant barriers facing these firms, the most important of which is access to finance. Research by the FMB also shows that small house builders face difficulties getting planning permission for small sites and this results in limited opportunities for small scale development. Both industry and Government now need to work together to find ways of addressing these challenges in order to ensure that the private sector is working.”