© The Herald
Originally published: 06.09.2006

Figures released by the Scottish Executive over the summer show a drop in both the number of new homes completed and started.

Yet one fact agreed upon by all quarters of the industry is that the demand for new homes continues to rise.

With the shape of the population changing rapidly, however, it might mean that the type of homes we are looking for - and can afford - is also set to start changing quite dramatically too. Something that everyone, from council planners, to builders and to buyers, are all already considering seriously. . .

The government figures weren't a huge surprise to Scotland's builders, who have long argued that customer demand for property is continuing to increase.

Yet Bruce Black, the executive director of Homes for Scotland, the group that represents companies building 95-per cent of new homes for sale, argues there is still no solution being offered by the Executive.

"New starts and completions may have fallen, but demand certainly hasn't, " he says. "It is another pointer to the failing planning system we have and the problems of infrastructure that have been so well publicised.

"Restrictions on land availability, and resultant high land costs, mean that we are being forced away from the starter market, where demand is not being met. And the balance between houses and flats, particularly in city areas, has been seriously distorted by local planning policies."

Just to add to the pressure comes a report from Savills, the international property services company, which argues the current types of properties available might also be failing to meet those customer demands.

And that this could cause problems for builders in the next two to three years - unless they are able to increase provision of smaller properties.

According to their Central Scotland Residential Development Survey, Savills says the vast majority of new build flats in the cities of Glasgow and Edinburgh account for 80-per cent and 75-per cent respectively of this market. However, onebedroomed flats reach just 12-per cent and 6-per cent in these areas.

Savills researcher Faisal Choudhry says the larger two-bedroomed supply is now exceeding demand, with more buyers on the market looking for the one-bedroomed and smaller two-bedroomed - and therefore more affordable - properties.

Helooked at 231 new build 50-plus unit residential developments currently marketed across 20 council areas, with 85 of them in Glasgow and Edinburgh.

And the researcher blames the lack of diversity on the problems of differences between planners and developers' aims.

"With current product types failing to meet occupier demand, the viability of some larger developments may be in doubt in the short term, " he says.

Overall, however, Savills says general supply is still healthy, with Glasgow, for instance, having 118 larger new build schemes in the pipeline, a total of around 22,000 homes. Future stock with planning consent might not become available on the market for another couple of years, however, Savills warns, due to a number of issues, including the volume of standing stock.

While it's clear that the majority of this demand for smaller properties is coming from potential buyers looking for the opportunity to get their first toe-hold on the property ladder, the potential for high-end larger apartments in some areas cannot be completely dismissed. Bryant's four-bedroomed duplex penthouse at Glasgow Harbour, for instance, recently sold within just a month of its show-apartment launch.

Yet there is no doubt that the continuing growth in single-person households is going to have a significant impact on the patterns of new build developments in the future.

Just last month Lloyd's TSB, announcing that the property market was "gently" subsiding, also said there would be a steady demand for homes because of the increase in singleton society.

With the average Scottish price now £141,338, following another climb of 1.1-per cent, prices here are still rising - although the boom is over.

Major cities continue to increase their values, with Glasgow up 9-per cent overall since last year, and Edinburgh up 13-per cent. And the big hitters are Aberdeen and Dundee, showing a rise of 17-per cent. Despite the march of the overall upward trend, however, there is no doubt the rate of the climb is considerably slower than in recent years.

And according to Professor DonaldMacRae, Lloyds TSB Scotland's chief economist, it is the growing demand for one-person homes that will help keep the market on the up.

"The main driver of the housing market in Scotland remains changes in population, " he said. "The number of households in Scotland is projected to grow by 11-per cent up to the year 2024. The number of households with one person is expected to exceed those with two or more adults during 2016.

"The Scottish economy is growing at or above trend level, giving forecast growth in 2006 or around 2-per cent. The Scottish house price boom is subsiding, but gently."

Not so with one aspect of the population, however. The future, it seems, is definitely single.