Fall in new home starts mask increase in completions, builders warn
An increase in housing delivery in the past year has been offset by a continuing downward trend in the number of new starts, Homes for Scotland has warned following the release of new quarterly statistics from the Scottish Government.
Scottish Government figures published yesterday report that there were 23,346 all-sector new build homes completed in Scotland in the year to end June 2023. This is an increase of 7% (1,481 homes) on the 21,865 completions in the previous year, and the highest annual figure to end June since 2008. Increases were seen for private-led new build completions (9% or 1,342 homes) and housing association new build completions (18% or 728 homes), whilst local authority new build completions dropped by 23% or 589 homes.
Meanwhile, the number of new build homes started across all sectors decreased by 12% (2,340 homes), with 17,425 starts in the year to end June 2023, down from 19,765 starts in the previous year, and the lowest annual figure to end June since 2016.
Private-led new build starts decreased by 7% (1,085 homes), housing association new build starts dropped by 21% (599 homes) and local authority new build starts decreased by 32% (656 homes).
Jane Wood, chief executive of sector body Homes for Scotland, said: “Our concerns regarding the downward trend in starts is not abating, with the 12% decrease year end to June 2023 evidencing the ongoing challenges and blockers facing our members in delivering the homes of all tenures that our country so badly needs.
“The sustained increase in completions is welcomed (rising 9% in 2022 and 6.3% in 2023) and clearly demonstrates both the high demand for new homes as well as the capacity of the home building sector to deliver more across the country. However, unless the challenges surrounding land availability and wider consents process are addressed, the number of completions in future years are likely to decrease.”
Jane added: “With every new home built in Scotland supporting 3.5 jobs but the number of major residential planning applications having fallen dramatically, it is crucial that we maintain the momentum in housing delivery to ensure future employment and investment opportunities are realised across both private and social sectors.
“Our Board recently discussed the current challenges facing the home building sector, as well as the social and economic benefits that come from increased housing delivery, directly with housing minister Paul McLennan MSP at its meeting last week and we remain committed to working with the Scottish Government to achieve this.”
Quarterly statistics on the Affordable Housing Supply programme show there were a total of 1,780 affordable homes completed in the latest quarter April to June 2023. This brings the total number of affordable homes completed in the 12 months to end June 2023 to 10,757, an increase of 12% (1,188 homes) on the 9,569 homes completed in the previous year, and the highest annual year-to-date completions figure since the start of the series in 2000.
There were increases in the number of affordable homes completed for social rent by 8% (604 homes), other affordable rent by 46% (500 homes), and affordable home ownership by 9% (84 homes).
Meanwhile, there were 643 affordable homes approved in the latest quarter April to June 2023, which brings the total number of affordable homes approved in the 12 months to the end of June 2023 to 6,042, a decrease of 22% (1,724 homes) on the 7,766 homes approved in the previous year, and the lowest annual figure to end June since 2013. There were decreases in the latest year to the end of June in the number of approvals for social rent (by 24%, or 1,449 homes) and for other affordable rent (by 39%, or 349 homes), whilst approvals for affordable home ownership increased by 9%, or 74 homes).
There were 1,118 affordable homes started in the latest quarter April to June 2023, which brings the total number of affordable homes started in the 12 months to end June 2023 to 7,124, a decrease of 2% (180 homes) on the 7,304 started in the previous year, and the lowest annual figure to end June since 2015. There was a decrease in the latest year to end June in the number of starts for social rent (by 8%, or 463 homes), whilst there were increases in starts for affordable home ownership (by 14%, or 113 homes) and for other affordable rent (by 26%, or 170 homes).
Shelter Scotland said the figures show the Scottish Government is choosing to neglect social housing. The charity warned that if ministers failed to pick up the sluggish pace of social housing delivery, Scotland’s housing emergency would continue to get worse.
In the last year, there’s been a 24% drop in the number of new social homes approved, which will inevitably lead to fewer homes being completed in coming years.
Between April and June 2023, 361 new social homes were signed off, a shocking 53% drop compared to the same quarter in 2022.
Meanwhile, work began on 8% fewer new social homes in the last 12 months compared to the previous year.
Shelter Scotland said while there was an increase in the number of starts for “other kinds of so-called ‘affordable housing’, including mid-market rent and affordable home ownership”, these projects will do nothing for the record numbers of people currently experiencing homelessness.
These figures come just weeks after statistics showed that more than 16,000 children became homeless in Scotland last year, an average of 45 per day, while record numbers of households are trapped in temporary accommodation.
Shelter Scotland director, Alison Watson, said: “The snail’s pace of delivery demonstrates clearly that the Scottish Government has got its priorities badly wrong and is neglecting social housing.
“No minister can claim ignorance of what that means; it means more children with nowhere to call home, it means more people trapped in miserable temporary accommodation, and it means Scotland’s housing emergency continuing to devastate lives.
“There have been countless reports, working groups, and summits all telling the Scottish Government the same thing; genuine social housing is the only way to end our housing emergency.
“Other so-called ‘affordable housing’ projects won’t cut it because they will do nothing to help the thousands of people in Scotland who are homeless right now.
“Instead of giving us the social homes we need, delivery has slowed to a crawl.
“There are no excuses for that; if this trend isn’t reversed then ministers are simply accepting that more people will inevitably experience homelessness.”
SFHA chief executive Sally Thomas added: “Today’s figures show that the number of social homes that were built this quarter are at the lowest level since mid-2020, during the height of the pandemic. That fact must be a wake-up call to the Scottish Government.
“Last week’s Programme for Government was described by the First Minister as ‘unashamedly antipoverty and pro-growth’. Yet when we know that delivering social homes is absolutely fundamental to both tackling poverty and economic growth, the rhetoric simply isn’t being met with action. It is now vital – more clearly than ever – that we see significant support for building Scotland’s homes now.”
Housing minister Paul McLennan said: “I am pleased that the number of affordable homes completed in the latest year is the highest annual figure since 2000, supporting almost 11,000 households to have an affordable place to live.
“The combined challenges caused by a hard Brexit and economic mismanagement by the UK government have triggered various issues including the rising cost of construction supplies and workforce challenges. The housing sector has done incredible work to deliver homes in these circumstances and we will continue working with partners to mitigate these impacts. We are also making £3.5 billion available in this parliamentary term, towards the delivery of more affordable and social homes.
“Despite the challenges, since 2007, Scotland has seen over 40% more affordable homes delivered per head of population than in England, and over 70% more than in Wales. We have already delivered 13,354 homes towards our next target of 110,000 affordable homes in Scotland by 2032.”