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Report finds that Scotland needs more SME builders

26 Nov 19 Scotland needs more SME home builders if housing growth is to be sustained, says a new report.

The report, Small Scale Home Builders: Increasing Supply, has been published by the trade body Homes for Scotland (HFS) following a year-long project.

In 2018, housing completions exceeding 20,000 for the first time in a decade. The report highlights how small and medium-sized enterprises (SMEs) have been slower to recover from financial crisis than larger players in the industry.

HFS chief executive Nicola Barclay said: “Despite the strong demand for housing that exists, smaller builders are delivering some 2,000 fewer homes per annum than before 2008. Encouraging more into the market is crucial, not just in terms of volume but particularly in relation to increasing diversity of product, creating local employment opportunities and sustaining more rural communities.

“Smaller companies generally have fewer resources and limited routes to finance which make the challenges of home building all the more difficult to overcome.

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“Thanks to their insight, and working alongside other key stakeholders such as the Scottish government and Heads of Planning Scotland, this report identifies solutions and prioritises the action required to support and grow the small scale home builder sector.”

The report comes as HFS begins tracking quarterly housing completions for 2019 against those of last year.  With 15 per cent growth achieved in 2018 compared to the previous year, maintaining such levels of improvement would see a return to the pre-recession build rate average of 25,000 new homes per annum that HFS believes Scotland requires within the next two years. However, this can only happen if the right conditions are in place to support them.

The organisation is also monitoring the volume of new build transactions and planning consents in the pipeline. “We will be keeping a close watch on these two metrics, given the importance of continuing growth to achieving Scotland’s housing and sustainable growth ambitions,” said Barclay.

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