Green shoots on the horizon despite slowdown in Scottish housebuilding
According to the latest Scottish Government data on new housing supply, the total number of new build completions across private, social and affordable housing in Scotland has fallen by 6% in the year to the end of June 2025 to 18,869, with new build starts 3% lower than the previous year at 15,202.
For the same period, the private sector completed 3.2% fewer homes (14,274), but started 12,247 new builds, 1.6% higher than the previous year. The social sector completed 14% fewer homes (4,595), with project starts also down 20% at 2,955.
Overall, private sector completions were at the lowest level since 2018 and social sector completions were the lowest since 2017, excluding the pandemic in 2020.
Alan Aitchison, Partner and Head of Real Estate and Construction in Scotland at RSM UK, said: “The housebuilding data for Q2 2025 indicates a continuation of the sluggishness in Scotland’s housing sector amid market caution and ongoing planning delays. The first sign of green shoots we’re all looking for may be present in the increase in private new build starts, however, the social housing sector continues to feel a squeeze, with sharp declines in completions and starts indicative that delivery is being hampered by funding constraints, planning hurdles and labour shortages.
“With housebuilders having to absorb inflationary cost pressures, there is the added risk that the sector could fall further behind on meeting housing targets, especially in social housing where margins are tighter. Housebuilders are therefore facing tough decisions around project viability and timings. Pricing for new builds also remains subdued due to weak demand, and developers are increasingly having to scale up incentives for buyers in order to shift stock.”
He added: “Looking ahead, while the headline figures paint a gloomy picture, there are further reasons for cautious optimism. Funding announcements from the government’s spending review may begin to trickle through in Q3, potentially mobilising stalled projects and injecting some much-needed momentum into the sector. Mortgage approvals in Scotland also rose by 15.7% in Q2, indicating improving house buyer sentiment.”