Builders warn rug is being pulled from under them


WITH figures announcing the first rise in new housing supply in six years, Scotland’s home building industry pointed to the success of the Scottish Government’s Help to Buy shared equity scheme and warned that sustained increases in production were now under threat as a result of funding for this year having run out.

Philip Hogg, Chief Executive of trade body Homes for Scotland, which represents companies delivering 95% of new homes built for sale as well as a significant proportion of affordable housing, said, “After the extreme difficulties encountered by our industry as a result of the economic downturn, it is very welcome news indeed that the downward trend, which has seen total output fall by over 40% since 2007 and languish at levels not seen since 1947, has been arrested.

“The figures show that the increase in supply was driven by the private sector and this clearly demonstrates the huge impact made by the very successful Help to Buy (Scotland) scheme, which has generated over 4300 sales and reservations since launch less than a year ago.

“Whilst we applaud the Scottish Government for introducing the scheme, funding for this year has already run out, leaving both buyers and builders very frustrated.  The industry has effectively had the rug pulled from beneath it before any firm recovery has had the opportunity to take hold. And the impact is already apparent with significant drops in sales in the weeks since the budget expired in July.  We therefore fear a return to decline in the months ahead.

“The high level of interest in the scheme was immediately apparent from launch and we have therefore consistently called for additional budget, or for future budget to be brought forward, to ensure the demand which clearly exists can be met. Whilst some extra funding was allocated, this simply hasn’t been sufficient with the result that buyers have been left disappointed and investment planning has been made very difficult for builders. The supply chain is similarly affected, unable to forecast and resource-up because of fluctuating activity levels.

“We have been working closely with the Scottish Government to try and find a resolution to the budget gap. However, despite making a number of suggestions, we are disappointed that a workable outcome has not yet been achieved.

“This is in stark contrast to the position in England which has extended its equivalent scheme to 2020 and ensured it is fully funded to meet demand. Comparable support is required here if we are to ensure investment is not diverted elsewhere within the UK.”