The latest Quarterly Housing Statistics for Scotland, published on Tuesday, reveal a mixed picture for the housing sector in the country. The data highlights a decline in both housebuilding starts and completions across all sectors, while also noting an increase in approvals and starts for affordable housing. This report delves into the key findings, implications, and the broader context of Scotland’s housing landscape.
Key Findings
Decline in Housebuilding Starts and Completions: The 12 months ending December 2024 saw a 9% decrease in housebuilding starts and a 7% decrease in completions compared to the previous year. This translates to 19,797 homes built and 15,050 new builds started during this period.
Sector Breakdown: The private sector accounted for 15,066 completed homes and 11,617 starts, while the social sector completed 4,731 homes and started 3,433 projects. Excluding the COVID-19 impacted year of 2020, private sector completions were the lowest since December 2017, and starts were the lowest since December 2013. Social sector completions also hit a low since December 2017, although starts were slightly higher than the previous year.
Affordable Housing Supply Programme: Despite the overall decline, the Affordable Housing Supply Programme saw an increase in approvals (6,440) and starts (6,501), both rising by 4% compared to 2023. However, completions of affordable homes decreased by 18% to 8,180.
The Scottish Government aims to deliver 110,000 affordable homes by 2032, with at least 70% for social rent and 10% in rural and island communities. By December 2024, 26,039 affordable homes had been completed, comprising 19,945 for social rent, 3,644 for affordable rent, and 2,450 for affordable home ownership. The increase in approvals and starts for affordable housing is crucial for meeting these targets, despite the decline in completions.
The decline in overall housebuilding activity reflects broader market challenges, including supply chain issues, regulatory hurdles, and economic uncertainty. The private sector’s low starts and completions suggest a cautious approach by developers, possibly due to concerns about market demand and profitability.
While some regions like East Lothian and Midlothian have seen higher rates of new build completions, other areas have experienced significantly lower activity. This regional disparity highlights the need for targeted policies to stimulate housing development across Scotland.
Average house prices in Scotland increased by 6.9% to £189,000 in the year to December 2024, outpacing the UK average. This rise in house prices, coupled with the decrease in new builds, may exacerbate affordability issues for potential homebuyers.
Rents in Scotland have also seen an increase, with average rents rising by 6.2% to £995 in the year to January 2025. This trend could further strain the housing market, as higher rents might deter potential buyers from entering the market.
The Quarterly Housing Statistics for Scotland to the end of December 2024 paint a complex picture of the country’s housing sector. While there are challenges in terms of declining housebuilding activity, the increase in affordable housing approvals and starts offers a glimmer of hope for meeting long-term targets. Addressing these challenges will require a multifaceted approach, including policy interventions to stimulate private sector development and continued investment in affordable housing initiatives.
In this context, it is crucial to balance the need for more housing with the challenges faced by developers and the broader economic context. The Scottish Government’s commitment to delivering affordable homes remains a key priority, and the success of this initiative will be closely watched in the coming years.
What’s the way forward?
Incentivize Private Sector Development: Offer incentives such as tax breaks or streamlined regulatory processes to encourage private developers to increase their activity.
Invest in Affordable Housing: Continue to prioritize affordable housing initiatives, focusing on both social rent and affordable home ownership options.
Address Regional Disparities: Implement targeted policies to stimulate housing development in regions with low activity, ensuring equitable access to housing across Scotland.
By addressing these challenges and opportunities, Scotland can work towards a more sustainable and equitable housing market that meets the needs of its diverse population.
