Scotland faces ‘an enormous challenge’ to build the homes needed for a growing population, according to new research from UK property consultancy, JLL.
In a new report entitled Rising to the Challenge, JLL warns Scotland is not building enough homes to meet either current demand or the Scottish Government’s current recommended targets for homes, with latest figures suggesting development volumes are plateauing at best.
In the year to Q2 2015, a total of 15,260 homes were completed, well short of both the five-year average to 2007/8 of 21,170 homes a year – and even further behind the government’s current recommended target of 36,000 homes a year.
The number of households in Scotland is forecast to rise by approximately 74,000 in the five years to 2020, with 15,100 in Edinburgh and a further 10,400 in Glasgow. Even accounting for the Scottish Government’s latest £195 million funding stimulus, JLL believes the forecast increase in households over the next five years will create demand that far outstrips the supply of additional housing.
Looking ahead, JLL says that development activity will begin to rise, albeit modestly, but this will lead to even greater competition and pressure between demand and available supply in both the sales and the lettings markets in Edinburgh and Glasgow.
The firm also predicts the next few years will finally see the embryonic start of Build to Rent or Private Rented Community (PRC) development in Scotland’s key cities.
Jason Hogg, director of JLL’s Residential team in Scotland, comments: “This will be a year of challenging questions rather than unbridled forward momentum. And there are several questions on a variety of residential issues that need addressing.
“The greatest challenge is how the house building industry and the Scottish Government will move towards building the greater volume of homes the country needs.
“Development activity is better than three to four years ago but still nowhere near the 23,000 homes a year target. The Scottish Government is allocating funds to assist, but we believe closer collaboration with the industry, more innovative and more directly beneficial initiatives as well as higher funding need to be considered if the housing shortfall is to be addressed.
