According to the Scottish Social Housing Tender Price Index (SSHTPI), tender prices fell 2.0% in 3Q 2023 compared with the previous quarter, but were still up 3.6% compared with 3Q 2022.

This is the first fall in prices since the middle of 2020 and reflects a downturn in construction output from the housing sector in Scotland, and GB as a whole.

Underlying construction costs of labour, materials and plant, as measured by the BCIS General Building Cost Index (GBCI), rose 1.8% quarter-on-quarter in 3Q 2023 and by 2.5% compared with the same quarter a year earlier.

Tender prices are driven as much by demand as by resource costs. The SSHTPI has tended to reflect the trend in demand from the housing sector.

Scottish housing output fell 7.0% in 3Q 2023 and 15% over the previous year. Over the same periods, total GB housing output fell 2% and 12%.

Over the year to 3Q 2023 underlying inflation, as measured by the Consumer Prices Index (CPI), rose by 6.7%.