Scotland has seen a dramatic dip in the construction of new homes, hitting a level not seen in nearly a decade. A comprehensive report by DJ Alexander Ltd, the nation’s premier lettings and estate agency, has shown a 24.4% drop in new build starts across all sectors in the span of a year. This dive has taken the number from 21,534 in 2022 to just 16,274 by September 2023, marking the most significant downturn since 2014.
The Plunge in Numbers
The findings, derived from the latest quarterly housing statistics up until September 2023, indicate that even during the tumultuous times of the pandemic up to Q3 2020, the sector saw 19,051 starts, showcasing just how severe the current slump is. Particularly hard-hit was the private sector, which witnessed an 18.8% decrease in new builds. However, it’s the social sector that’s facing an unprecedented crisis, with a 40.5% year-on-year plummet, leaving just 3,292 new builds in its wake, the lowest since records began in Q2 1996.
A Crisis in the Making
David Alexander, the CEO of DJ Alexander Ltd, expressed deep concern over these figures, “At a time when we have housing emergencies in our two largest cities and also in Argyll and Bute it is worrying that new build starts should have declined so much. The reasons for the decline in the private sector could be to do with delays in planning, rising costs, anticipated lower demand due to the cost-of-living crisis and the increase in mortgage costs in the last eighteen months. But this is still concerning given that in some parts of the country demand remains extremely strong. Any reduction in future supply will simply exacerbate that demand and result in substantially higher prices in the coming years.”
Social Housing
The report also highlights a disturbing trend in social housing starts, a sector essential for providing affordable housing options to those most in need. Alexander stresses that the sharp reduction in social housing starts, even before the announcement of reduced funding in the December Scottish Budget, signals a worrying slowdown. With tens of thousands languishing on social housing waiting lists and demand in the private rented sector at record highs, the outlook appears grim.
A Call to Action
Alexander’s analysis doesn’t just paint a picture of the current state but serves as a dire warning for the future. With reduced volumes of new social housing, Scotland faces a potential crisis characterised by skyrocketing demand, inflated rents, and climbing house prices, pushing the dream of homeownership or even affordable rent further out of reach for many. His call to action is clear: Scotland must ramp up its housebuilding efforts across the board to address this looming crisis head-on.