Scots are building 30 new homes every day as hope emerges for house building sector

By TOM PETERKIN
Published on 31/08/2012 13:42

SCOTLAND’S new housing supply has decreased by two per cent in the last year, Scottish Government figures revealed today.

Scotland has seen a huge ­increase in the number of privately-built houses begun in the past year – the first rise in five years.

Government figures published yesterday show construction began on 10,732 private properties in 2011-12, compared with 8,731 the previous year – a 23 per cent rise offering a glimmer of hope for Scotland’s ailing construction industry.

Economists welcomed yesterday’s figures, saying there was hope that the activity could spark an economic revival and suggested the rise could be down to increasing numbers of people choosing to self-build their homes.

The figures were contained in the Scottish Government’s “Housing Statistics for Scotland 2012” document, which showed the private sector accounted for the majority of Scotland’s housing stock.

Of Scotland’s new and completed 16,882 housing stock,private properties account for 10,039. The figures showed 4,776 were built by housing associations, and 1,085 are council houses.

The number of council homes built last year also increased, with local authorities completing 1,085 new homes in 2011-12, up from 614 the previous year, which is the highest number since devolution.

But when the figures were taken as a whole, construction professionals were alarmed by statistics showing the new housing supply has decreased by 2 per cent in the last year.

The supply of new houses, whether new build, refurbishments or conversions fell from 17,267 units in 2010-11 to this year’s 16,882 figure, reflecting tough economic conditions being experienced by the construction industry.

Nevertheless, David Bell, Professor of Economics at Stirling University, said the increased number of starts made on private properties was encouraging.

He said: “I am hearing anecdotal evidence of people hiring small construction companies to self build.

“Clearly people may be able to build a home now for perhaps less than was the case three or four years ago when the market for labour was tighter and the building materials weren’t as competitive to buy.”

He added: “It is encouraging, because construction has been hit quite hard by the downturn. It is one of the key reasons why growth has been negative. It is one of the main contributors towards negative GDP, because the public sector contracts have diminished a lot. Hopefully, things are beginning to improve.”

The rise was also welcomed by housing minister Keith Brown, who claimed that Scottish Government initiatives such as the £730 million invested over the next three years to boost the number of affordable homes would help.

The minister also pointed to the Scottish Government’s guarantee to support up to 6,000 new-build house purchases through a private sector mortgage indemnity scheme.

Michael Levack, chief executive of the Scottish Building Federation, said: “Overall, the construction of new homes in Scotland is at its lowest ebb since current records began some 16 years ago.

“As a critical sector of the Scottish construction industry and with the demand for new homes continuing to rise, it’s genuinely frightening to see house-building numbers continuing to slide as they currently are.

“The housing sector urgently needs an injection of additional direct capital investment to help nurse it back to life.”