Scottish Housing Market Review: Q2 2022

9. Housing Starts and Completions

New build completions – all sectors

The most recent published Scottish Government figures for new build completions cover the year to end September 2021, in which there were 20,056 completions across all sectors in Scotland, an increase of 26.3% (4,174 homes) on the previous year, when activity levels were affected by Covid-19 related lockdown measures.

Private New Build Sales

While more recent data on private completions is not available due to delays as a result of Covid-19-related data supply issues, the UK HPI does include private new build sales, which provide a good indication of latest trends. As Chart 9.1 shows, while private new build sales decreased during the restrictions on non-essential construction activity in Q2 2020, falling by 85% annually in May 2020, there has been a strong recovery since then, with an increase in private new build sales on a rolling one year basis to February 2022 of 36.9%. However, when we compare the one year period to February 2022 against the one year period to February 2020 (i.e. prior to Covid-19), private new build sales fell by 6.3%.

Source: UK HPI (Scotland)

Chart 9.2 provides the growth in private new build sales by region over the one year period to Q4 2021, relative to the year prior. Private new build sales increased by an annual 35.1% for Scotland as a whole. Analysing the data by region, it can be seen that private new build sales increased in all regions shown, with the largest increase in private new build sales in the Ayrshires, Dumfries and Galloway (57.3%) and the smallest increase in private new build sales in the Forth Valley of 24.1%. (Source: UK HPI).

Source: UK HPI (Scotland)

Affordable Housing Supply Programme

Chart 9.3 shows that the supply of affordable housing has increased since the restrictions on non-essential construction activity were eased in Q3 2020. 9,757 affordable housing completions were recorded over the one year to Q1 2022, an increase of 50.6% compared to the year prior, and the highest financial year figure recorded since the start of the series in 2000-01. However, over the same period approvals have fallen slightly by 0.8% to 7,821, whilst starts have decreased by 18.7% to 8,253. (Source: SG).

Source: Scottish Government

The level of affordable completions achieved in Q1 2022 also meant that the 50,000 affordable housing supply target was met by the end of March 2022. Of the 50,000 affordable homes completed between 1 April 2016 and 23 March 2022, 34,405 homes (69%) were for social rent, 6,245 (12%) were for affordable rent, and 9,350 (19%) were for affordable home ownership. Now that the 50,000 affordable homes target has been met, the longer-term ambition is to deliver 110,000 affordable homes by 2032, of which at least 70% will be for social rent and 10% will be in remote, rural and island communities.