NewsArticle-21-05-2009

Homes for Scotland, the representative body for the home building industry in Scotland, has elected John Low, Managing Director of Stewart Milne Homes North (right), as Chairman for the year 2009/10.  

Addressing nearly 500 senior industry representatives and guests at the organisation’s recent annual lunch, he acknowledged the fundamental changes which have taken place within the home building sector over the last 12 months as a result of the credit crunch and identified the future funding of new infrastructure investment and rapidly changing policy environment surrounding public and private investment in housing supply as the two biggest issues currently facing the sector.

Home building has a recognised ability to drive wider economic recovery but, as levels of customer interest continue to increase and companies trade out existing stock, Low warned of the need to avoid future “boom and bust” cycles with lack of supply fuelling conditions for a potential return to double-digit house price inflation saying:

“The fundamental demand for new homes has simply not evaporated.  Whilst there may be a wider debate in relation to the future tenure mix of housing supply in Scotland, the fact is that the majority of Scots will still continue to own, or aspire to own, their own home.  This needs to be recognised and supported by politicians, planners and lenders alike as we contemplate recovery.

“Much change has been made to the planning system in terms of primary legislation and national frameworks but so far on the ground, in many instances, this is still not enabling, encouraging and promoting development in the kind of ways we had hoped for.  If industry activity is to be sustained and grow in due course, we require concerted efforts from both the Scottish Government and Local Authorities to increase land supply and open up new opportunities for development on a wholly different economic basis.”

As the move towards a low carbon economy continues, Low also highlighted that the industry has already reduced the carbon emissions of the average Scottish house by well over 60% from 1990 levels1.  In an environment where production costs are still rising but land and home values are falling, he questioned the pace at which new Building Standards further reducing carbon emissions from new homes by an additional 30% and planned for implementation in October 2010 will be introduced, noting that the industry would have no option but to pass the associated costs directly on to consumers – a move which would inevitably further reduce new home supply at a time when the opposite was required2 – and said:

“Breathing space to allow us to recalibrate our business models, appraisals and market knowledge is required before our industry can step forward again down this road.”

Ends

Enquiries to:

Jennifer Kennedy, Homes for Scotland – 0131 455 8350 

Notes to Editors:

1.  According to a recent report from Scottish Building Standards and BRE (“Comparison of the Level of CO2 emissions from buildings built in 1990 and in 2008”), the home building industry has already reduced the carbon emissions of the average Scottish house by well over 60% from 1990 levels.  

To access this report, please visit: http://www.sbsa.gov.uk/research/summ_co290_08.htm.

2.  Latest NHBC figures show a 76% decrease in the number of private homes started in Scotland in the three months to March 2009 compared with the same period in 2008.

3.  Homes for Scotland represents the country’s home building industry which, prior to the onset of the credit crunch,:

• was the largest source of private investment in Scotland and the largest user of the planning system
• built 20,000 new homes, contributed £6bn to the economy and directly impacted the employment of 100,000 people (2007 figures)

But with 26,000 jobs already lost and much new development across the country now effectively on hold, Scottish new build housing output has plummeted.  This will have far-reaching and long-term social and economic consequences.  Browse this website for further market commentary and information on the action and support Homes for Scotland is calling on from both the UK and Scottish Governments.