Prior to the economic downturn, the home building industry was the largest source of private investment in Scotland, contributing around £6 billion to the Scottish economy - that's 6% of GDP and greater than that of higher profile industries such as agriculture, fishing, electronics and tourism.
However, since 2007:
- total housing output has slumped by 40%, compounding the significant housing shortfall already in existence
- only 16,111 homes were completed in 2015
- this is some 19,000 less than the 2015 target the Scottish Government set back in 2007
- it is estimated that around 26,000 jobs (half of the industry's directly employed workforce) were lost in the wake of the downturn
- significant investment in schools, roads, infrastructure and other community facilities has effectively vanished
Yet Scotland's population and the number of new households being created continues to grow. Indeed, it has been estimated that 465,000 new homes will be required by 2035 in order to meet housing need - that's 21,500 a year yet the build rate is just 70% of what is required to just stand still.
Whilst some encouraging market signals may now be emerging, we need to ensure that any increased activity is sustained. It is therefore imperative that major supply-side issues (such as development finance, land supply and skills and materials shortages) be addressed if output is to increase to the levels required.
Click here to access the Economic & Social Benefits of Home Building report conducted by Nathaniel Lichfield & Partners.