According to the latest Scottish Government data on new housing supply, the number of total project starts across private, social and affordable housing in Scotland in Q1 2025 (3,341) has fallen by 22% on Q4 2024 (4,075), the lowest level since the Covid-19 pandemic.

The total number of completed dwellings in Q1 2025 was 3,790, down 42% on Q4 2024 (5,390).

Alan Aitchison, Partner and Head of Real Estate and Construction in Scotland at RSM UK, said: “The housebuilding data for Q1 2025 reflects a subdued housing market in Scotland, with the construction sector still cautious about committing working capital. This nervousness and slowdown in housing developments is being driven by a lack of demand from consumers. In recent years, we’ve seen volatility in mortgage rates and removal of affordable products, alongside the closure of the Help to Buy (Scotland) scheme, which could offer some explanation to the downtick in demand and completion of new homes.

“While the Low Cost Initiative for First Time Buyers (LIFT) is still available to support buyers, we know that tenant demand for rental properties continues to outpace supply, which is driving up prices in the rental market and impacting sales of new homes. In addition, there’s concern that there’s a longer-term shift in culture within younger generations who don’t aspire to home ownership; rather their focus is on having flexibility in their accommodation and shorter-term commitments, aligned to their desired career paths and to how they gain access to other amenities such as cars, media and technology.”

He added: “As such, we’re seeing housebuilders strategically timing completions and commencement of phases within their existing sites, to try to match demand. This trend continues despite the government’s pledge to increase housing supply through initiatives including the Affordable Housing Supply Programme. Although reintroducing a scheme similar to Help to Buy could help to stimulate consumer demand, in the long term, it’s likely that Scottish Government will need to shift its focus and incentivise housebuilders and attract investment to develop housing for build to rent, to meet changing consumer behaviour.”