October 24, 2020

Scottish builders urge Sturgeon to more than double new house builds

House builders north of the border are calling on the Scottish government to step up new builds to 25,000 a year and to include more private homes. Homes for Scotland, HfS, the country’s housebuilding trade body, is unhappy that the government’s current targets are predominantly for social rent.

Chief executive, Nicola Barclay, wants the government to ask public agencies to work with developers to more than double the current annual targets of around 10,000 new homes a year.

“A number of notable steps have already been taken to assist in ongoing housing delivery, such as the lifeline £100m emergency liquidity fund for SME home builders,” she said. “But further longer-term action is required if we are to ensure we can provide the homes of all tenures that Scotland needs, with all the wide-ranging benefits this brings in terms of employment, social outcomes, and economic growth.”

HfS estimates every home built supports four jobs and has produced a report this month outlining the sector’s contribution to the economy.

Brokers Hank Zarihs Associates said property development lenders were keen to support projects particularly in Edinburgh and Glasgow where there is a high demand for more housing.

Housing delivery hit by social distancing rules

Ms. Barclay said social distancing and hygiene rules meant fewer operatives could be on-site at any one time so construction of needed homes was taking longer and costing more.

“This compounds the significant upfront expenditure incurred by developers to acquire land and complete construction, with cost recovery very often only achieved when the last properties are occupied.”

HfS members were due to complete more than 6,000 homes between April and June 2020, injecting over £1.3bn of transaction income into the economy. However, in June this number contracted to just over 4000 homes.

Ms. Barclay urged the government to consider how housing could be a “springboard” for a Scotland-wide recovery.

“With the appropriate Scottish government support, we can minimize the effects of the coronavirus on housing delivery, SME builders, jobs, and the economy.”

Scottish first minister Nicola Sturgeon set the target of delivering 50,000 affordable homes, including 35,000 for social rent, between 2016-17 and 2020-21 back in 2015.

Nearly 54,000 grant-funded affordable homes have been approved in Scotland from the beginning of 2016-17 until March 2020 with 41,309 completions.