The challenges faced by small and medium sized home builders and the need for urgent regulatory reform to get this crucial part of the Scottish housing market growing again are being spotlighted this week with a range of activities including a special roundtable session with the Ministers for Housing and Public Finance. Other MSPs are undertaking visits to vitally important rural and brownfield housing developments being delivered by SMEs across the country.
This dedicated “Awareness Week” follows recently published independent data review revealing an alarming reduction in Scotland’s SME home building sector. According to representative body Homes for Scotland (HFS), the proportion of new homes sold by those building between three and 49 homes per annum has fallen from around 40 per cent in 2017 to 20 per cent in 2023. It also shows a significant increase in the number of SME home builders being dissolved, with 2023 levels 45 per cent higher than in 2019.
Speaking ahead of the Ministerial roundtable taking place on Wednesday (21 August), HFS Chief Executive Jane Wood said:
“Our research is the first of its kind, quantifying and contextualising Scotland’s SME home building sector and filling a significant data gap. Its findings paint a sobering picture of the impact barriers to growth are having on this vital group.
“SMEs simply do not have the economies of scale available to larger developers to navigate what is an overly complex and under-resourced planning system. This, coupled with the high-risk upfront financial costs involved in residential development and an ever-increasing regulatory burden, is making many SME sites unviable.
“With SMEs essential for building out rural and brownfield sites and the added context of a national housing emergency and a staggering 28% of Scottish households (693,000) identified as being in some form of housing need, what further evidence does the Scottish Government require to take action and introduce the regulatory reform required to facilitate the delivery of much-needed, warm and sustainable new homes?
“We are grateful to the Ministers for Housing and Public Finance for joining us this Wednesday to hear first hand the challenges that only SME home builders themselves can provide. HFS and its members are ready to work with them to ensure Scotland has a positive regulatory environment which fosters housing growth rather than diminishing it.”
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