DJ Alexander: New build starts in Scotland down by a quarter

The property firm said that the latest quarterly housing statistics up to September 2023 showed that all sector new build starts fell 24.4% from 21,534 in 2022 to 16,274 the following year.

This was the lowest all sector September end annual figure since 2014. Even during the pandemic to Q3 2020 there were 19,051 starts.

The figures show that the private sector fell by 18.8% but the biggest drop occurred in the social housing sector which saw an annual collapse of 40.5% between September 2022 and 2023. Just 3,292 social sector new build starts happened in the latest year compared with 5,535 the previous year. This is the lowest number of social sector new build starts since the data started being collected in Q2 1996.

David Alexander, chief executive officer of DJ Alexander Scotland, said: “At a time when we have housing emergencies in our two largest cities and also in Argyll and Bute it is worrying that new build starts should have declined so much.”

“The reasons for the decline in the private sector could be to do with delays in planning, rising costs, anticipated lower demand due to the cost-of-living crisis and the increase in mortgage costs in the last eighteen months.”

Mr Alexander continued: “But this is still concerning given that in some parts of the country demand remains extremely strong. Any reduction in future supply will simply exacerbate that demand and result in substantially higher prices in the coming years.”

“But it is the reduction in starts in the social sector that should set alarm bells ringing. Given that these statistics relate to the time prior to the announcement of reduced funding for affordable housing in the December Scottish Budget, this is a sign that the number of properties being built was already slowing.”

He concluded: “With tens of thousands on social housing waiting lists, and demand in the private rented sector at an all time high, the situation will only worsen in the coming years if the volume of new social housing is cut even further.

“We need more social housing, more private rented sector homes, and more housebuilding in general if demand is to be met. Without these houses there will inevitably be soaring demand, higher rents, higher house prices, and many more people unable to find the home they want or can afford.”