Scottish private sector housebuilding at 30-year low 28 May 2010
Scott MacNab, The Herald
Private housebuilding has fallen to its lowest level in almost 30 years, new figures show.
Official statistics show that new builds have almost halved in two years, although Government-funded affordable homes are still being built.
The figures were published as it emerged that house-purchase lending in Scotland mirrored the rest of the UK by falling 33% in the first three months of 2010.
There were 11,447 new homes built last year in the private sector – the lowest level since 1981 when the figure was 11,021. It is also down from 21,674 in 2007 and 17,712 last year.
Housing Minister Alex Neil said: "Unfortunately, the level of private new build completions has continued to fall sharply in comparison with previous years. However, to help Scotland’s hard-pressed house builders, we acted decisively and stepped in when the private housing sector was experiencing an unprecedented fall in building activity. We moved quickly to bring forward some of next year’s affordable housing budget as accelerated expenditure. Scotland’s housing system faces major challenges."
The number of new Government-funded affordable homes completed in Scotland rose to 5846 in 2009/10 – the highest recorded since 1981/82 – up from 4913 last year and by 2609 from 2006/07.
Neil, who this week launched a discussion document with Deputy First Minister Nicola Sturgeon to confront the public spending freeze facing the sector, added: "It is encouraging that last year there was a record number of new affordable homes built in Scotland.
Indeed, not since the early eighties have we witnessed such a surge in new affordable homes across the country."
Scottish Building Federation chief executive Michael Levack said the figures showed the extent of the downturn on the industry and warned that the impact of public spending cuts was now being felt.
"I'm deeply worried that private housebuilding appears to be in such a weak condition," he said.
"With public budgets being cut, this suggests that the immediate prospects for Scotland's building industry remain extremely challenging.
We need more action to breathe life back into private-sector construction and to sustain public capital investment in infrastructure, schools, hospitals and affordable housing."
Meanwhile, the Council of Mortgage Lenders found there were 9,700 loans to homebuyers, worth £1.1 billion, down from 14,400 (£1.6bn) in the last three months of 2009.
Many buyers brought forward their moves to take advantage of the stamp duty holiday on properties valued at less than £175,000 before it came to an end in December.
However, the number of Scottish homebuyer loans in the first three months of the year was up 28% on the low of 7600 year-on-year. The country's share of UK house purchase loans was back up to 9%.
First-time buyers accounted for 40% of all house purchases in Scotland, putting down a 23% deposit on average – 2% higher than during the last three months of last year. This compares with the Scottish average of 30%, and is the first time that average deposits for this group have fallen below one-quarter of all sales since late 2008, a sign that the group are finding mortgages more affordable.
Kennedy Foster, a policy consultant with the council, said: "The pace of recovery in Scotland at first sight appears slower than in the rest of the UK, but in fact throughout the current housing cycle, market activity
in Scotland has followed that of the whole of the UK very closely, but with a lag of around one-quarter."
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Levvel will be expanding and evolving their services as a response to the economic climate and as a consequence of the changed political situation. We will launch the new services and updated website in the summer. As new housing and planning policies emerge, we will be hosting more regional seminars, starting in the South West.
