Scottish Housing Market Review Q1 2024

10. Housing Supply

10.1. New Build

There was a strong rebound in new housebuilding completions once the Covid-19 restrictions on non-essential construction activity were eased in Q3 2020, but more recently completions have begun to fall: the 20,992 new build completions across all sectors in Scotland in the year to end Q4 2023 was a decrease of 11.4% (2,700 homes) on the previous year. This is illustrated in Chart 10.1, which includes a breakdown of new build completions by sector. Meanwhile, there were 16,017 new build starts across all sectors over the same period, down by 23.8% (5,009) relative to the previous year.

Source: Scottish Government

10.2. Affordable Housing Supply Programme (AHSP)

Chart 10.2 similarly shows that, following a substantial increase after covid restrictions were released, the number of affordable homes delivered has recently begun to decrease: the 9,680 affordable housing completions recorded over the year to end Q4 2023 represented a decline of 4.8% (493 homes) compared to the year prior. Over the same period approvals have fallen by 4.8% (316 homes) to 6,239, whilst starts have decreased by 20.4% to 6,046 homes.

Source: Scottish Government

10.3. Council Tax on Second and Empty Homes

As from April 2024 local authorities have new powers that allow them to charge up to double the full rate of council tax on second homes. Previously, while councils could vary the council tax rate from the default of a 50% discount, they could only increase it up to the full rate of council tax. All local authorities, with the exception of Falkirk, Glasgow City and North Ayrshire, have chosen to charge up to double council tax on second homes. Meanwhile, also from April 2024, new owners of homes that have been empty for longer than 12 months can benefit from a grace period of 6 months without a premium being applied if they are undertaking repairs and renovations; councils have the discretion to extend this period depending on the circumstances of individual cases. The aim of these changes is to help increase housing availability by encouraging more homes to be used for living in.