It seems that it is not just temperatures which are rising across Scotland. The Scottish Government recently published the Scottish Housing Market Review Q2 2022 which reveals an increase in the supply of both private and affordable new build homes over the previous year. However, with a large increase in the cost of new build construction materials, the price of new build homes is also rising rapidly and different locations in Scotland appear to be weathering the changes better than others.
20,056 new build homes were completed across all sectors in Scotland over the year to end September 2021, a 26.3% increase on the previous year (4,174 homes). Private new build sales increased over the year to February 2022 by 36.9% relative to the previous year. Upon comparison to the year before the Covid-19 pandemic, however, new build private sales have actually decreased by 6.3%.
While sales increased by 35.1% for Scotland as a whole over the one-year period to Q4 2021, relative to the year prior, the region with the largest increase in private new build sales was Ayrshire/Dumfries and Galloway (57.3%) with Forth Valley having the smallest increase at 24.1%.
Average house prices measured by the UK Housing Price Index, increased in Q1 2022 by 10.6% relative to Q1 2021, the second highest quarter of house price inflation since before the 2008 financial crisis and prices are rising rapidly with more recent monthly data to February 2022 indicating an annual increase of 26.1%.
These figures are largely impacted by the large increase in new build construction materials. Since Russia's invasion of Ukraine, a 22.0% annual increase in construction materials has been reported in April 2022 which has sky-rocketed prices.
The Scottish Government's target of delivering 50,000 affordable homes was reached as 9,757 homes were delivered over the one-year period to Q1 2022, a 50.6% increase on the previous year (3,279 homes). This is the highest figure recorded in any financial year since 2000-01.
Longer Term Forecast
While the statistics show now that the 50,000 affordable homes target has been achieved, the focus is on delivering 110,000 affordable homes by 2032.