Quarterly Housing Statistics released today found there were 19,227 starts in the year to end September 2022, a fall of 12% (2,580 homes) from the 21,807 starts in the previous year, and 24% (6,047 homes) below the 25,283 homes started in the pre-pandemic year to end September 2019.

Private-led new build starts decreased by 11% (1,774 homes) and housing association new build approvals dropped by 27% (817 homes), whilst local authority new build starts increased slightly by 1% (11 homes).

In terms of housing completions, there were 22,905 all-sector new build homes completed in Scotland in the year to end September 2022. This is an increase of 10% (2,023 homes) on the 20,882 completions in the previous year, and the highest annual figure to end September since 2008.

Increases were seen across private-led new build completions (7% or 1,000 homes), local authority new build completions (42% or 840 homes), and housing association new build completions (5% or 183 homes).

Separate figures published as part of the UK House Price Index show a total of 12,395 private new build sales transactions in Scotland in the year to end October 2022, up 11% (1,228 transactions) on the 11,167 transactions recorded in the year to end October 2021.

Latest social sector new housebuilding figures for the year to end December 2022 show an increase of 10% (600 homes) to 6,673 completions, with local authority completions rising by 7% (166 homes) to 2,415 and housing association completions up by 11% (434 homes) to 4,258.

However social sector starts fell by 23% (1,175 homes) to 3,832, with local authority starts increasing by 2% (38 homes) to 1,879 but with housing association approvals decreasing by 38% (1,213 homes) to 1,953.

Separate quarterly statistics on the Affordable Housing Supply programme show there were a total of 2,566 affordable homes completed in the latest quarter October to December 2022. This brings the total number of affordable homes completed in the 12 months to end December 2022 to 9,727, a slight increase of 1% (111 homes) on the 9,616 homes completed in the previous year. There were increases in the number of completions for social rent by 18% (1,254 homes), however other affordable rent completions decreased by 35% (538 homes), and affordable home ownership completions fell by 47% (605 homes).

Meanwhile, there were 1,299 affordable homes approved in the latest quarter October to December 2022, which brings the total number of affordable homes approved in the 12 months to end December 2022 to 6,554, a decrease of 22% (1,860 homes) on the 8,414 homes approved in the previous year, and the lowest annual figure to end December since 2013. There were decreases in the latest year in the number of approvals for social rent (by 21%, or 1,352 homes), other affordable rent (by 5%, or 48 homes), and affordable home ownership (by 41%, or 460 homes).

There were 1,235 affordable homes started in the latest quarter October to December 2022, which brings the total number of affordable homes started in the 12 months to end December 2022 to 7,502, a decrease of 24% (2,398 homes) on the 9,900 started in the previous year, and the lowest annual figure to end December since 2015. There were decreases in the latest year in the number of starts for social rent (by 19%, or 1,382 homes), other affordable rent (by 33%, or 446 homes), and affordable home ownership (by 46%, or 570 homes).

Quarterly affordable housing supply statistics are used to inform progress against Scottish Government affordable housing delivery targets, in which the ambition is to deliver 110,000 affordable homes by 2032, of which at least 70% will be for social rent and 10% will be in remote, rural and island communities.

There have been a total of 7,493 completions so far against the 110,000 target, across the period 23 March 2022 to 31 December 2022, consisting of 6,172 (82%) homes for social rent, 764 (10%) for other affordable rent, and 557 (7%) for affordable home ownership.

Figures on the remote, rural and island communities element of the target are planned to be reported on as part of future annual affordable housing supply out-turn reports, although we are considering whether it is feasible for these figures to be reported on a quarterly basis in addition to this.

Responding to the figures, SFHA chief executive Sally Thomas said: “These statistics, which show a worrying 27% decline in new housing association homes being started in the year to September 2022, underline the importance the new First Minister must give to social housing. If Scotland is to reach its ambitious target of 110,000 new affordable homes by 2032, housing associations will play a key role, and the incoming First Minister must redouble the Scottish Government’s focus on supporting housing associations and co-operatives to provide homes to those who need them most.”

Jane Wood, chief executive of sector body Homes for Scotland (HFS), raised concerns that the fall in new home starts will add to the housing shortfall of more than 110,000 homes that has accumulated in Scotland since 2007 when pre-financial crisis completion levels were 25,000.

Ms Wood said: “Whilst there was a much needed ten per cent increase in the number of new homes completed in the year to end September 2022 (up 2,023 to 22,905) , this positive news is again offset by the 12 per cent overall fall in the number of starts (down 2,580 to 19,227). Particularly worrying in the context of the Scottish Government’s Affordable Housing ambitions is the 27 per cent drop recorded in housing association approvals.

“The appointment of the new First Minister presents the perfect opportunity to review the regulatory areas and other issues creating blockers to residential development across sectors to ensure that housing in Scotland meets the needs and aspirations of everyone living here. We and our members are committed to achieving this.”

A Scottish Government spokesperson said: “Scotland has led the way in the delivery of affordable housing across the UK with 118,124 affordable homes delivered since 2007, with 83,291 of these for social rent.

“We are aware of the global issues affecting construction which are impacting housing delivery so are working closely with the construction industry and housing partners to mitigate this where possible.

“We continue to collaborate with all our partners to achieve our shared goal of delivering more affordable homes.”