Housing statistics quarterly update: June 2021

5. UK House Price Index (HPI) new build sales transactions, as a measure of private-led housebuilding activity to end January 2021

This section sets out the latest quarterly and monthly trends in the number of new build sales transactions in Scotland to end January 2021, based on residential property transaction figures published as part of the UK House Price Index (HPI)^[3].

These figures may be helpful in providing an indication of recent levels of private led new housebuilding activity, particularly given the current delay in the publication of the Scottish Government new housebuilding private-led starts and completions figures.^[4]

It should be noted that the HPI-based figures are not directly comparable to the Scottish Government time series on private-led new build starts and completion, due to some differences in how the two sets of figures are constructed. For example, the UK HPI new build sales transaction figures are based on the date of the completed sales transaction rather than the date of completion, and will also not include self-build dwellings or homes built privately for tenures other than private sales.

Further information on the quality of the HPI data for Scotland, which is sourced from Registers of Scotland, is available in the UK HPI Quality Assurance section of the UK House Price Index web page.

Table 3 and Chart 7a below illustrate how the UK HPI figures compare to previously published Scottish Government Private sector-led completion figures in each quarter from January to March 2019 onwards, and also provide the latest trends seen in the UK HPI new build sales transactions figures across the two more recent quarters to October to December 2020.

It can be seen across the period January to March 2019 to April to June 2020 (the latest available quarterly figures for Scottish Government Private led completions) that both data series follow similar trends in respect of increases or decreases compared to the previous quarter. The Scottish Government figures are higher in most quarters, but this is likely to be explained by differences in how the figures are constructed, given that some self-build dwellings or dwellings built privately for tenures other than private sales will be included, whereas the HPI figures are based on private sale transactions only.

Sources: UK House Price Index: reports - GOV.UK (www.gov.uk) (March 2021 data downloads) and Scottish Government Private Sector-led new build completions

The latest quarterly HPI figures show that there were 3,053 new build sales transactions in Scotland in the quarter October to December 2020, an increase of 2,340 on the 713 transactions seen in April to June 2020 and an increase of 645 (27%) on the 2,408 transactions seen in July to September 2020. This follows the easing of COVID-19 related construction and housing market restrictions from late June 2020 onwards, following which there has been a phased re-start of construction activity.

Despite these increases since April to June 2020, the 3,053 new build sales transactions in October to December 2020 is 754 (20%) transactions below the level seen in the same quarter in the previous year. More recent HPI figures for the month of January 2021 show a similar picture compared to the previous year, with 494 transactions in this single month, a decrease of 191 (28%) on the number of transactions in January 2020 (see Chart 7b).

This brings the total transactions in the year to end December 2020 to 8,559, a decrease of 30% (3,707 transactions) on the 12,266 transactions recorded in the year to end December 2019.