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Scottish Government urged to build on housebuilding momentum

As the level of housing completions continues to head in the right direction, the country’s home building industry has urged the Scottish Government to build on this positive news to enable it to deliver more of the homes Scotland’s growing population needs.

Official statistics released yesterday found there were 18,182 new build homes completed across all sectors over the year ending June 2018, an increase of 4%, or 695 homes, on the previous year.

The rise included increases in housing association completions (25% or 618 homes) and local authority completions (25% or 306 homes), whilst private-led completions fell by 229 homes (2%). The total number of social sector completions (housing association and local authority starts combined) increased by 924 homes (25%).

There were 19,903 all sector new build starts in the 12 months to end June 2018, a figure which is 1,121 homes (6%) higher than the number of completions in the same period, but which is a decrease of 1,231 homes (6%) on the 20,534 starts in the previous year. Private-led starts fell by 1,593 homes (11%) and housing association approvals decreased by 215 homes (4%), whilst local authority starts increased by 577 homes (48%). The total number of social sector starts (housing association and local authority starts combined) increased by 362 homes (6%).

Nicola Barclay, chief executive of trade body Homes for Scotland, said: “It’s great to see ongoing growth in the overall number of homes being built, but just under seven hundred extra homes over the last year is not going to solve our housing crisis. In order to return to the levels of a decade ago, we would need to see ten times this number on an annual basis.

“Scotland’s housing market remains amongst the most affordable places to live in the UK, and huge social and economic opportunities exist for the Scottish Government to attract further housing investment from both within Scotland and elsewhere – if it can create and maintain the favourable conditions this requires.

“Ways in which this can be achieved include ensuring the Planning Bill currently going through the Scottish Parliament meets the original objective of delivering more homes; encouraging more entrants into the industry; supporting those SMEs who want to develop more homes; preserving a regulatory environment that promotes investment and ensuring policies like Help to Buy are continued until such times that the mortgage market fully supports First Time Buyers.

“Ultimately, it needs joined-up thinking across portfolios, therefore we look forward to seeing how (this week’s) Budget supports sustainable housing growth so builders can contribute even more to Scotland’s social wellbeing and economic success.”

Housing minister Kevin Stewart welcomed the figures which also revealed a 21% rise in the number of affordable homes delivered in Scotland during the last year.

A total of 8,767 affordable homes were delivered for the year to September 2018, an increase on the 7,271 completions in the previous year.

As a result, the total number of affordable homes provided since 2007 has reached 80,104.

The figures also showed there were 5,340 social rented homes delivered, an increase of 864 homes, or 19%, on the previous year.

Kevin Stewart MSP said: “Making sure everyone has a safe, warm and affordable home is central to our drive for a fairer and more prosperous Scotland.

“That is why I am proud that this government has now delivered more than 80,000 affordable homes since 2007. This is a significant achievement – boosting the supply of affordable homes in communities right across the country.

“During the course of this Parliament we are investing more than £3 billion to deliver our target of at least 50,000 affordable, high-quality homes, including 35,000 homes for social rent.

“While we know this is an ambitious target, we have shown we can deliver on housing and we will continue to do so.”

However Graeme Brown, director of Shelter Scotland, said the figures prove the Scottish Government has a long way to go to meet its 2021 housing target.

He said: “The programme to develop 35,000 new homes for social rent by 2021 is one of the most important projects on the Scottish Government’s agenda.

“The latest figures show that with half the time gone only 11,825 social homes have been completed to date. This leaves much of the target on the drawing board and means we will have to see an acceleration in building if the target is to be met.”

Graeme Brown added:  “The more homes programme is a promise to Scotland that must not be broken. It represents the biggest investment in social housing since the 1970s and a chance to begin to restore the foundations of our housing safety net which has been badly damaged by decades of underinvestment.”

Source: Scottish Construction Now

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England housing stock increases but housebuilders still fall short of target

The number of new homes completed in England in the last year reached its highest level in a decade, but growth has plummeted as Brexit uncertainties take hold.

Just over 222,000 more homes were added to England’s housing stock in 2017-2018, according to figures released today by the minister of housing, communities and local government (MHCLG).

But the increase represents growth of only two per cent on last year, reflecting the tough market for housebuilders amid rising building costs and Brexit uncertainty.

In 2017 growth from the previous year was 15 per cent.

The figures fall short of the government’s plans to build 300,000 new homes a year, which it outlined in its 2017 budget in a bid to tackle the country’s housing crisis.

Blane Perrotton, managing director of chartered surveyors Naismiths, said: “You don’t need to follow every tortuous twist and resignation of the Brexit saga to identify the culprit for the slowdown.

“Fragile demand and a lack of developer confidence since the 2016 vote have both slammed on the brakes, even here in the engine room of the construction industry.”

The report comes as housebuilders bear the brunt of numerous resignations after Theresa May unveiled her draft Brexit deal. Shares in Barratt Developments and Persimmon have fallen over seven and eight per cent respectively since the cabinet agreed on a draft deal last night.

But the Home Builders Federation (HBF) has welcomed the report, saying progress was being made in the industry’s efforts to address the housing shortage.

HBF executive chairman Stewart Baseley said: “Today’s numbers are yet another sign that the home building industry is delivering the increases in housing supply the country needs.

“Whilst the second-hand market remains sluggish amidst wider economic uncertainty, with Help to Buy enabling first-time buyers to purchase new build homes, builders have continued to invest and increase output.”

“Whilst huge progress is being made, government needs to continue to work with all parts of the housing sector to assist them to deliver further increases if we are to hit their 300,000 target,” he added.

Communities secretary James Brokenshire said: “Today’s figures are great news and show another yearly increase in the number of new homes delivered, but we are determined to do more to keep us on track to deliver the homes communities need.”

Source: City A.M.

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UK housebuilders under pressure

The UK housebuilding sector faces several challenges, all of which have weighed on its performance, but valuations still remain interesting.