Scottish Housing Market Review: Q2 2025

11. Lending to House Builders, Insolvencies and Construction Prices

11.1. Lending to House Builders

The average value of outstanding loans to housebuilders in 2024-25 (£6.6bn) was 6.4% higher in nominal terms than in 2023-24 and 5.8% higher than in 2019-20, prior to Covid.

Source: Bank of England

11.2. Insolvencies

The number of construction companies registered in Scotland entering insolvency fell during 2020 during the early phases of the Covid pandemic, before rising during 2021. The trend has subsequently flattened out around pre-covid levels: the 194 insolvencies recorded across 2024-25 was 4% below the level in 2023-24 (203) and 7% lower than in 2019-20. In contrast, while the number of insolvencies of construction companies registered in England and Wales fell by 4% in 2024-25, the 4,112 insolvencies recorded in 2024-25 was 33% above the level recorded in 2019-20.

Source: The Insolvency Service

11.3. Input and Output Prices for New Housing

Note: In previous editions of the Scottish Housing Market Review, the construction output price index and construction materials price index were used to track cost inflation associated with building new homes. However, the ONS has paused publication of producer price indices, including the above two indices, until further notice, due to an issue identified with the chain-linking methods used to calculate the indices. For further information visit the ONS webpage.

ONS average weekly earnings data show that annual growth in total pay in the construction sector in GB has accelerated in recent months, from 1.9% in the three months to May 2024 to 7.5% in the three months to April 2025.

Source: ONS