A sharp fall in the number of homes being built north of the border is likely to push up house prices and rental values, according to housebuilders in Scotland.

Nicola Barclay, chief executive of trade body Homes for Scotland, said that she was “deeply concerned” by statistics which showed the volume of new builds being started dropped by 5% to 16,870 in 2016, dragged down by a private sector decline of 14% to 11,816. 

She warned that Scotland will continue to face a housing crisis unless ground is broken on more sites, even though the number of social sector homes with funding approved is increasing, with housing starts in the sector rising last year by 24% to 5,054.

Barclay said: “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.

“I am deeply concerned by the 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. 

“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.”

She added: “Not only is the lack of an adequate housing supply across all tenures stifling ambition and aspiration, it is also continuing to pressurise house prices and rents as well as threatening Scotland’s future success and social well-being.”