Frustrated home builders caution against latest housing stats

Philip Hogg
Philip Hogg

Scotland’s home building industry today responded with caution and frustration to latest official quarterly statistics announcing a significant increase in the number of new build completions for April-June compared to last year.

Official statistics released today show that across all sectors, 4,583 homes were completed in April to June this year, the highest quarterly figure since 2010, and 29 per cent higher than in the same quarter last year.

The figures mean the number of new homes built in Scotland is at its highest level for over three years.

However, with the details published on a UK-wide “day of action” aiming to push housing up the political agenda, Philip Hogg, chief executive of trade body Homes for Scotland, cautioned against the results and instead predicted a flat 2014.

He said: “Whilst any rise in the number of much needed new homes being built is, of course, to be warmly welcomed, what these figures show beyond doubt is the game-changing impact that the Help to Buy (Scotland) shared equity scheme had in the first half of 2014.

“However, funding for the scheme for this financial year ran out in July since which time sales have significantly dropped off.

“With the industry having to adjust production as a result, it is our view that this will be reflected in the statistics for the later part of the year. We therefore fear that overall activity levels for 2014 will be broadly flat, meaning that Scotland will continue to fall well-behind the number of new homes required to meet the country’s housing need.

“Buyer interest is plain to see after so many years of pent-up demand. So not only is this situation highly frustrating for would-be home buyers, particularly our young people and growing families, it also places more pressure on an already overburdened rented sector at a time when industry recovery should be being fully nurtured.

“Yet over six weeks from the new £125m funding for housing supply announced in the Draft Budget, we still await details of how this investment is to be allocated.

“Scotland needs greater commitment and bold action from politicians of all parties and at all levels if is to ensure its people have access to the range of quality housing options they deserve.”

Ed Monaghan
Ed Monaghan

Ed Monaghan, chief executive of Mactaggart & Mickel Group, added: “The continued rise in new build completions is welcome news for the industry particularly given the increasing contribution from the private sector. As a business we are seeing sales and site footfall rising consistently and our recent annual results were back to pre-recession levels.

“It is important to highlight the impact Help to Buy (Scotland) has undoubtedly played in boosting sales and consumer confidence. The success of the scheme highlights how crucial initiatives that stimulate the market are to the industry and we would therefore call upon the Scottish Government to look again at level of funding available to maintain this important initiative.”

The increase in the latest quarter was driven by a rise in the number of private sector led new build completions which rose to 3,676, an increase of 1,150 homes (46 per cent) compared to the same quarter in the previous year. Meanwhile the number of new housing association homes fell by 47 (7 per cent) compared to the same quarter in 2013 and new local authority homes also decreased in this period by 59 (19 per cent).

However the number of new houses built in the year to end June 2014 still remains well below pre-recession levels, and is 38 per cent below the figure of 25,503 homes recorded in the year to end June 2007.

Housing minister Margaret Burgess said the latest completion figures bring the Scottish Government closer to its target of delivering 20,000 homes for social rent by March 2016, with 80 per cent of homes completed.

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