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Housing output in Scotland continues to flatline

Overall housing output north of the border continued to flatline with just 88 more homes, the equivalent of around 1%, built in 2016 compared with the year before, and yet the housing statistics provided by Homes for Scotland suggest that things will not improve any time soon with a 2% decline in the number of homes started in the same period.

It is widely accepted that boosting the supply of new homes in Scotland would stimulate economic growth in the country, not to mention provide more much needed new homes, but the data from the industry body indicates that the widening supply-demand imbalance in Scotland, which is placing upward pressure on home values, is unlikely to be resolved anytime soon.

According to Your Move’s latest Scotland House Price Index, residential property prices increased by an average of £3,217 in Scotland in April, taking the average property value to £175,087. Consequently, annual house price growth rebounded strongly, rising from 2.2% in March to 3.6% in April, and is now outpacing the 3.5% rate for England and Wales as a whole in the year to April.

“Concerning for the population of Scotland is the big picture in relation to total figures across all tenures for which completions are still over 36 per cent down on 2007 levels and still less than what was built in 2010,” said Nicola Barclay, chief executive of Homes for Scotland. “The private sector is the biggest housing contributor overall yet the number of homes being started on site was down 8% in 2016, equivalent to over 1000 homes.”

“With Scottish economic growth predicted to be half that of the UK in 2017, building the homes our country needs could help fill the void that will be left by large, soon to be completed infrastructure projects such as the Queensferry Crossing,” she added.

Barclay insists that to help deliver the sufficient number of new homes needed, a supportive policy framework, particularly in relation to the planning and regulatory system, is required “which should encourage housing investment and development”. 

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