Housebuilding crisis: Demands for 'urgent' action to tackle homes shortage

Housebuilders are warning that demand for new homes won’t be met unless the Scottish Government makes changes to planning legislation.

Members from the industry met with the housing and local finance minister Paul McLennan for a roundtable on Wednesday to demand “urgent” action.

Housing emergencies have been declared in eight of Scotland’s local authorities.

Issues such as the economy, skills shortages, planning policies and financial barriers for small and medium-sized housebuilders (SMEs) have been cited among the challenges faced by the sector.

Figures show 26,000 extra construction workers needed in Scotland by 2028 to meet demand; a skills gap of more than 5,000 workers a year.

Leigh Kennedy is a third year apprentice joiner with CCG homes. She’s learning crucial skills that the construction industry is crying out for.

Third year joiner apprentice Leigh Kennedy STV News

She told STV News: “From a young age I’ve always been interested in construction. Throughout school, I did craft and design, I was good at that.

“My dad is a bricklayer, so I was doing things with him when I was younger.

“I didn’t quite realise that was what I wanted to do until a few years later when I went back to college. I realised you can make a career out of it, go and learn while getting paid, which is a bonus.

“You get more of a chance to do things on site than in college. You can do it over and over, make mistakes and do it until you get it right.”

It comes after the number of housing association new build starts dropped to their lowest levels since 1988.

Statistics released by the Scottish Government show that overall there were 20,992 new homes built across all sectors in 2023, a fall of 11% since the year before.

There was an even bigger fall for the number of newly built homes being started last year.

Some 16,017 houses started construction, a decrease of 24% and 5,009 fewer than 2022.

The figures come after the Scottish Government slashed the affordable housing budget by nearly £200m during the December Budget.

Eve McCurrich is the managing director of Whiteburn Projects.

She said: “The duration to even get a site started is going from six months up to three years before we are even on site.

“In addition, we’ve seen repercussions like interest rates, inflation and buyer sentiment, such as the confidence in the market.

“Everything takes longer. The limited cash we have is locked up for longer. We’re not getting returns for investors. We can’t plan recruitment.

“It’s a real challenge for the industry at the moment. It’s a constant changing landscape.”

Housebuilders say they are facing a variety of challenges STV News

The latest figures from Homes For Scotland show there is a shortfall of around 100,000 homes in Scotland.

In addition, 700,000 households have one or more forms of housing need.

Homes For Scotland chief Jane Wood said: “It’s a difficult economy and market out there.

“Small and medium sized housebuilders, which are critical to the housing ecosystem, are struggling. They don’t have resources such as economies of scale.

“The biggest issues are planning regime and timescales and how they manage debt and finance in terms of getting planning consent.

“We need urgent action now. We understand the constraints in government capital budgets, but housing is critical to our economy and social wellbeing.

“I’m not confident until we see innovation and ambition for the housing supply in Scotland.

“I’m not feeling the urgency just yet, especially given we have a housing emergency in Scotland, but I hope they see the trajectory down south.

“It does take innovation, it does take new thinking but the solutions are there. It’s about political will.

“This isn’t about a five year plan, this about making changes now.”

Housing Minister Paul McLennan said: “SME housebuilders make a valuable contribution to the delivery of high quality homes in communities across the country.

“Today, we discussed the specific challenges faced by SMEs within the wider context of a challenging building environment, and looked at the actions we can take to support SME’s to continue to deliver the homes we need across Scotland. We are committed to meeting again with SME housebuilders to continue these discussions.

“Planning plays a crucial role in supporting businesses and investment in Scotland. Having already reformed the system in recent years, we now are working with stakeholders to improve planning resources and practice.

“Since 2007, we have supported the delivery of more than 130,000 affordable homes, with more than 93,000 of those being for social rent.

“We will continue to build on that record with almost £600m of investment in the Affordable Housing Supply Programme this year and we remain focused on delivering 110,000 affordable homes by 2032.”