David Alexander

The latest statistics show 19,227 all sector new build starts in the year to the end of September 2022, a decrease of 12% (2,580 homes) on the previous year.

This was down from 21,807 to September 2021 and is 24% (6,047 homes) below the 25,283 homes started in the pre-pandemic year to end September 2019.

The decline was across all sectors with a drop of 11% (1,774 homes) for private-led new builds; housing association new builds fell 27% (817 homes); while local authority new build starts increased but only by 11 homes in total which was equivalent to a 1% rise.

Of concern is that the number of starts for affordable homes was 7,502 which is a decrease of 24% (2,398 homes) in the 12 months to December 2022. This is down from the 9,900 homes started in the previous year and the lowest annual figure since 2015.

The decline was across the board for all social housing sectors with approvals for social rent down 19% (1,382 homes); other affordable rent (down 33% or 446 homes) and affordable home ownership declining 46% (570 homes).

David Alexander, chief executive of DJ Alexander Ltd, said: “At a time when we need an expansion in the number of new houses in Scotland to cope with growing demand, we see the number of starts across all sectors declining and, worryingly, still 25% lower than the pre-pandemic year of 2019.

“There are likely to be many reasons for this including a shortage of materials, an appropriate available workforce, and rising costs, but it is imperative that we address the key issue of housing supply to ensure that the current and growing demand will be met.”

Mr Alexander continued: “The reduction in private new builds may be answered by market forces but I do believe demand has not declined and there remains a serious need for a prolonged period of new builds to cope with the growing number of homebuyers.

“When you consider that during the period from 1996-97 to 2007-08 the number of new build starts never fell below 20,000 and peaked at 28,400 in 2006-07 yet in the ensuing 14 years the number of new starts has only been greater than 20,000 in two years it is obvious we have been building too few properties for a long time and this needs to be addressed.

“More worryingly the decline in affordable housing starts is of serious concern given the enormous number of people desperately in need of reasonably priced homes. The number of these properties being built should be rising rather than falling, and to decline by 24% in a single year is a sign that the system is not working properly.”

He concluded: “There are always many suggestions on how to resolve Scotland’s housing problems but at its heart it is simply a matter of supply and demand.

“Falling new build starts is not going to resolve the housing shortage any time soon and no matter how it is explained we need to build more homes to meet the growing needs of our society, and this is not happening at present.

“We need to have an environment that encourages investment and more growth in the property sector and works with and involves all the key players in construction, land management, investment, lettings, and landlords.”