Scottish Housing Market Review: January - March 2021

Housing Supply: Starts and Completions

Source: UK HPI (Scotland)

The most recent published Scottish Government figures cover the year to end June 2020, in which there were 17,029 new build homes completed across all sectors in Scotland, a decrease of 21% (4,439 homes) on the previous year, with activity levels being affected by the introduction of COVID-19 lockdown measures from March to late June 2020.

Private New Build Sales: Scotland

While more recent data on private completions is not available due to delays as a result of Covid-19-related data supply issues, the UK HPI does include private new build sales, which provide a good indication. This shows that private new build sales decreased during the restrictions on non-essential construction activity in Q2 2020, as can be seen in Chart 6.1, with sales falling by 85% annually in May 2020. Since then, sales have recovered, increasing by an annual 5.0% in February 2021. However, on a rolling 1 year basis private new build sales remain negative (-32.2%).

Chart 6.2 provides the annual growth in private new build sales by region from Q4 2019 to Q4 2020. Private new build sales increased by 27.1% relative to Q3 2020 for Scotland as a whole but fell relative to Q4 2019, decreasing by 19.4%. Analysing the data by region, it can be seen that over the one year period certain regions have fared better than others, with Aberdeen/shire and Moray falling by 5.2% but the Forth Valley decreased by 29.7%. (Source: UK HPI).

Affordable Housing Supply Programme

The supply of affordable housing has increased since the restrictions on non-essential construction activity in Q2 2020, although supply remains below the Q1 2020 level for completions and approvals. 3,160 affordable housing completions were recorded in Q1 2021, an increase of 1,226 (63.4%) on Q4 2020 but an annual decrease of 9.5% (-333). There were 4,818 starts in Q1 2021, up by 112.3% (+2,549) on Q4 2020 and an annual increase of 1.1% (+52). Approvals increased by 81.5% in Q1 2021 to 3,790 (+1,702), although this was an annual decrease of 37.6% (-2,279) (Source: SG).

Key Points

Private new build sales have recovered recently, rising by an annual 5.0% in February 2021. However, over the 12 months to February 2021, sales were down by an annual 32.2%.

The supply of affordable housing has recovered strongly since Q2 2020. 3,160 affordable homes were delivered in Q1 2021, an increase of 1,226 (63.4%) on Q4 2020.

Source: UK HPI (Scotland)

Source: Scottish Government