Scottish Housing Market Review Q2 2026
Quarterly bulletin collating a range of previously published statistics on the latest trends in the Scottish housing market.
11. Lending to House Builders, Insolvencies and Construction Prices
11.1. Lending to House Builders
Between January and May 2026, the average monthly value of outstanding loans to UK housebuilders was £6.9 billion, an annual increase of 6.5%.
Chart 11.1 Loans outstanding to firms involved in construction of domestic buildings: UK (£ Millions, Monthly data, to May 2026)
Source: Bank of England. The sharp increase in March 2020 was linked to Covid.[6]
11.2. Insolvencies
In 2025-2026, 191 construction companies registered in Scotland entered insolvency, a slight decrease of 1.5% compared with the 194 insolvencies recorded in 2024-2025. Insolvencies were also 5.9% lower than in 2023-24. While a similar trend was evident for construction companies registered in England and Wales, where insolvencies in 2025-26 were 10.9% lower than in 2023-24, the level of insolvencies remained above its pre-Covid level, while for companies registered in Scotland it has returned to its pre-Covid level.
Chart 11.2 Number of registered company insolvencies in the construction sector (4-quarter moving total to Q1 2026)
Source: The Insolvency Service
11.3. Input and Output Prices for New Housing
Recent indicators suggest that construction cost pressures in Great Britain remain relatively subdued. ONS data shows that the annual growth rate in the construction-output price index for GB was 1.7% in March 2026, down from 2.0% in February. This is significantly below the post-Covid peak of 12.3% reached during 2022, as well being less than the long-run average of 3.7% recorded since January 2014.
Looking at the components of construction costs, labour cost pressures have weakened. Seasonally adjusted weekly earnings data, expressed as an average for the 3-month period ending in the relevant month, show annual growth in total pay in the construction sector in GB fell by 1.0% in April 2026, following decreases in February 2026 (-0.4%) and March 2026 (‑1.6%). As shown in Chart 11.3, before February 2026, the most recent decline in pay was November 2020 when it decreased slightly by an annual 0.8%.
Meanwhile annual growth in new housing construction materials prices, at 3.2% in April 2026, was slightly higher than the 2.9% recorded in March 2026. The latest growth rate is below the long-run average of 4.1% recorded between January 2014 and April 2026. The Middle East conflict and the resultant disruption to supply chains and global markets could drive up material costs in the short to medium term.
Chart 11.3 Annual change in the output and materials price indices for new housing, and weekly earnings in the construction sector: UK (Monthly data, to March 2026 for output and April 2026 for earnings and materials)
Source: ONS
Contact
Email: Bruce.Teubes@gov.scot