The Federation of Master Builders in Scotland (FMB Scotland) has called for a “diverse mix of new homes” to make up the Scottish Government’s plan for 50,000 new houses in five years.

Responding to new analysis from the Scottish Parliament Information Centre (SPICE) which revealed a decline in house building in Scotland over the last year, the industry body said enabling smaller firms to pick up more of the slack would alleviate pressure on the government and deliver more homes for all Scottish people.

Gordon Nelson, director of FMB Scotland, said: “The Scottish Government has demonstrated a welcome commitment to house building, and it is right to highlight its successes in maintaining a high level of new affordable housing.

“However, this does not overshadow what seems to be a generally stagnating wider market. Scotland was the only part of the UK to see overall housing completions decline year-on-year in 2015/16 when compared to 2014/15, and it is this lack of supply that is driving house price inflation and exacerbating affordability problems.

“Affordable housing is undoubtedly critical, but it needs to be part of a diverse mix of new homes.”

Mr Nelson added: “It is vital that the Scottish Government finds a way to stimulate the SME house building sector to increase housing of all tenures. Many of the reforms and changes that smaller developers are calling for would come at little or no extra cost to the taxpayer and could facilitate a resurgence of smaller, locally-based house builders.

“In particular, a renewed focus within the planning system on small scale development, by encouraging local authorities to maximise the use of small sites for delivering new homes, would be an inexpensive way of invigorating the private market and increasing output.”