This is set against the backdrop of what is now a national housing emergency, and at a time when 28% of Scottish Households (693,000) are in some form of housing need.
Jane Wood, Chief Executive at HFS said: “this research fills a significant data gap and is essential if we are to develop evidence-based policy to effectively address the housing emergency. Given the vital role which SME home builders have to play in Scotland’s housing ecosystem, it shows alarming reductions in terms of market share and the number of companies which have been dissolved. This clearly has capacity implications for the delivery of much-needed new homes of all tenures.
Our research found that SME home builders are key to unlocking the brownfield sites which the Scottish Government has said it wants to prioritise. Our data also reveals their importance in delivering housing in rural and remote areas.
SME home builders have particular challenges in relation to the viability of their operations, not least in relation to economies of scale, ever increasing regulation and the upfront costs associated with residential development. Above all, however, the planning and consenting systems are having a hugely detrimental impact, especially in relation to the speed of processing and resourcing. This is a hugely frustrating state of affairs.”
HFS commissioned Rettie to update key statistics on how Scottish SME home builders (specifically those delivering between 3 and 49 units per year) are operating, with a particular focus on the 2019-23 period. The main objective of the exercise was to estimate the number of active home builders in Scotland over time, including by geographical location and development type.
Dr John Boyle, Director of Research & Strategy at Rettie said; “I am pleased to have been able to contribute to this new Homes for Scotland Scottish Water report on the SME sector, and its sharp decline in recent years. As well as reducing our development capacity and capability, this also has significant negative economic effects. This sector needs to have a policy response to provide support and remove barriers to business.”