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Mon January 20 2020

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Scotland needs more SME builders says industry body

5 Feb 19 Addressing Scotland’s housing deficit will require a significant increase in the number of smaller building businesses in operation and the busting of myths surrounding land banks, according to the head of an industry body.

Homes for Scotland chief executive Nicola Barclay is addressing members of the Scottish Parliament today. She said that a deficit of 80,000 homes has arisen in Scotland over the last decade.

“Given the fact that some 80,000 fewer homes have been built in Scotland since 2008 whilst the growth in number of households over broadly the same period has more than doubled, it is easy to see why our country is in housing crisis and why many people struggle to find a home that is affordable and that meets their needs and aspirations,” she said. “A major contributory factor has been a near 40 per cent drop in the amount of companies building less than 50 homes a year and who traditionally focused on smaller sites.”

Barclay said that Homes for Scotland has formed a special project group and is working closely with the Scottish government to define the solutions required.  “These may include easier access to development finance; the allocation of smaller sites; simplified planning processes; and a desire from regulators and enablers to help this important part of our industry to thrive once more,” she said.

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Urging everyone to unify around the need for more homes, she added: “Home building is a complex, costly and lengthy business around which some fundamental misunderstandings have grown such as the common accusation that companies deliberately hold back land to inflate house prices.  As many studies have shown, most recently last year’s Letwin Review, there is absolutely no evidence of this: it simply doesn’t make any business sense in terms of cash flow and return on investment for builders to hold on to land they could put houses on and sell. 

“What builders do need, however, is a strategic pipeline of land to inform their investment, employment and training decisions.  If we are to build the homes we need, we must move beyond this red herring and examine the real issues delaying housing delivery.”

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