Scottish housing crisis deepens as construction plummets

Scotland’s housing sector has seen a major downturn, with an 11% reduction in all-sector housebuilding starts and a 4% drop in completions between the financial years 2023-24 and 2024-25.

In the 12 months to March, the Scottish government’s data reveals that only 15,053 new homes were started, and 19,288 were completed, reflecting a marked decline from the previous year.

The private sector delivered 14,798 homes, while the social sector contributed 4,490.

New starts followed a similar trend, with 11,902 private sector projects and 3,151 social sector initiatives.

Failing to address housing crisis

David Alexander, the chief executive of Scotland’s largest lettings and estate agency, DJ Alexander Scotland, said: “The latest Scottish quarterly housing statistics are a damning indictment of the continuing failure to address the country’s current housing emergency.

“At a time when the country is crying out for more new housing there continues to be a lack of action, encouragement or financial support at all levels.

“The Scottish government’s much vaunted affordable housing policy is down by a fifth over one year, while the social housing sector continues to languish at a level not seen since 2012-13.”

He added: “This simply cannot be allowed to go on.

“The only way to resolve the current imbalance between supply and demand in all sectors is to build more homes right now.

“Without immediate action house prices will continue to rise; rents will continue to increase; waiting lists will continue to grow; and individuals and families will continue to be unable to find a suitable home in Scotland now or in the future.”

Social sector starts drop

Excluding the Covid-affected 2020-21, private sector completions remained stable but starts hit their lowest since 2012-13.

Social sector completions and starts also reached their lowest levels since 2016-17 and 2012-13, respectively.

The Affordable Housing Supply Programme, a cornerstone of the Scottish government’s plan to deliver 110,000 affordable homes by 2032, reported 4,775 approvals, 5,424 starts and 7,444 completions in 2024-25.

However, these figures represent a steep decline, with completions down 22% (2,070 fewer homes), approvals reduced by 31% (2,167 fewer homes), and starts falling 21% (1,471 fewer homes) compared to the previous year.

Since the programme’s inception, 28,537 affordable homes have been completed, with 77% for social rent, 14% for affordable rent, and 9% for affordable home ownership.

Strong record on delivery

The cabinet secretary for housing, Màiri McAllan, said: “The Scottish government has a strong record in supporting the delivery of affordable homes, but demand is high, and we must step up our efforts.”

She highlighted the government’s investment of £768 million in affordable housing for the current financial year and an additional £2 million to address empty homes, alongside plans to strengthen tenant protections through Awaab’s law.

Ms McAllan said the housing challenges are not unique to Scotland and are made harder due to an ‘incredibly difficult financial settlement’ from the UK government.

She also pointed to Scotland’s comparative success, having delivered 139,000 affordable homes since 2007, including 99,000 for social rent – 47% more per head than England and 73% more than Wales as of March 2024.