Report highlights ‘grand challenges’ facing Scotland’s housing sector

Nicola Barclay

TRADE body Homes for Scotland has commissioned new research, which revealed a number of challenges and opportunities facing the nation’s housing sector.

Ahead of the organisation’s annual conference on 13 November, Homes for Scotland commissioned research by the Fraser of Allander Institute.

Last year, housing completions exceeded 20,000 for the first time in Scotland since the recession. HFS estimates that 25,000 homes are needed each year to keep up with demand, not including the 80,000 ‘shortfall’ in the supply of housing since 2008.

HFS said that whilst recent growth is encouraging, current economic and political uncertainty means it remains ‘fragile’.

Nicola Barclay, chief executive of HFS will state to conference delegates that, “It is absolutely vital that steps are taken to ensure housing demand can be met, and to avoid exacerbating the existing undersupply of homes. Home building provides huge social and economic benefits and is a key area for growth in Scotland. Increasing supply to pre-recession levels of 25,000 homes per year would generate a further 19,000 jobs, £0.5bn more in economic output and over £25m in local infrastructure enhancements.”

The Fraser of Allander report shows ‘significant variations’ in the level of growth across different areas of Scotland. Much of the growth has been driven from activity in the east.

House price growth is also inconsistent, with levels much stronger in areas like Edinburgh (6% over the year), in comparison to Aberdeen (-7.9%).

The Fraser of Allander research considers a number of ‘grand challenges’ for housing including population change, economic growth, technological change, climate change, productivity and tackling inequalities.

Professor Graeme Roy of the Fraser of Allander Institute commented, “The Scottish economy continues to show a positive but relatively fragile level of confidence. House prices continue to grow, and the construction sector has picked up in recent years.

“Brexit uncertainty looks set to continue with the departure date now in early 2020. This continued uncertainty will impact negatively on investment and consumer confidence. It is important not to lose sight of the major challenges and opportunities that are coming down the line and which will shape the future direction of our economy – and the demand for housing – far more than any short-term uncertainty or constitutional change.”