Scottish Housing Market Review: Q3 2021

Housing Supply: Starts and Completions

Key Points

Private New Build Sales have increased since the restrictions on non-essential construction activity, with the number of transactions across the latest months Jan 2021 to May 2021 being broadly in line with activity levels seen in the 2019 pre-pandemic period. However, on a rolling 1 year basis private new build sales remain negative (-5.3%)

A total of 1,595 affordable homes were delivered in Q2 2021, an increase of 1,398 on Q2 2020 during which activity was largely paused due to lockdown measures, although the number of homes delivered in the 12 months to Q2 2021 is down 5% (374 homes) to 7,864 completions, compared with the previous year.

The most recent published Scottish Government figures cover the year to end September 2020, in which there were 15,852 new build homes completed across all sectors in Scotland, a decrease of 28% (6,132 homes) on the previous year, with activity levels being affected by COVID-19 lockdown measures.

Private New Build Sales: Scotland

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. This shows that private new build sales decreased during the restrictions on non-essential construction activity in Q2 2020, as can be seen in Chart 6.1, with sales falling by 85% annually in May 2020. Sales have recovered strongly since then, increasing on an annual basis by 571.6% to May 2021, with the large growth figure due to the lockdown in place the previous year. However, on a rolling 1 year basis private new build sales remain negative (-5.3%).

Source: UK HPI (Scotland)

Chart 6.2 provides the annual growth in private new build sales by region from Q1 2020 to Q1 2021. Private new build sales increased by an annual 12.4% for Scotland as a whole. Analysing the data by region, it can be seen that private new build sales have increased in the majority of regions over the one year period, with the largest increase in private new build sales in Aberdeen/shire and Moray (21.9%) and the only decrease in private new build sales was in the Forth Valley, a reduction of 2.1% annually. (Source: UK HPI).

Source: UK HPI (Scotland)

Affordable Housing Supply Programme

Chart 6.3 shows that the supply of affordable housing has increased since the restrictions on non-essential construction activity in Q2 2020, although supply remains below the Q1 2020 level. 1,595 affordable housing completions were recorded in Q2 2021, an increase of 1,398 on Q2 2020 during which activity was largely paused due to lockdown measures although the number of homes delivered in the 12 months to Q2 2021 is down 5% (374 homes) to 7,864 completions, compared with the previous year. Over the last year, approvals have dropped by 36% to 7,972 whilst starts have increased by 3% to 11,097. (Source: SG).

Source: Scottish Government