House building in Scotland nosedives after Nicola Sturgeon’s rent controls, figures show

House building in Scotland has dramatically “collapsed” in the past year after the introduction of Nicola Sturgeon’s rent controls, official figures have disclosed.

The SNP government said 16,404 new homes were started in 2023/24, a drop of 3,000 or 15 per cent compared to the previous year. Over the same period, the number of homes being completed dropped by 17 per cent (4,150) to 19,632.

In the private sector, the number of new homes being started fell to 12,904, down 16 per cent and the smallest level since 2014/15. This was even lower even than during the pandemic.

A total of 14,589 private homes were completed, a drop of 13 per cent and the second lowest annual total since 2017/18, with only the 2020-2021 year of the Covid outbreak being worse.

Sharp drops were also recorded in the number of council and housing associations homes being started (down 14 per cent) and completed (down 27 per cent). Completions were the lowest since 2020-2021 and starts the lowest since 2012-2013.

The drop comes after the SNP cut this year’s affordable housing budget by 26 per cent and rent controls introduced by Miss Sturgeon’s administration backfired on tenants, with Scotland suffering the largest rises anywhere in the UK.

The SNP introduced an emergency rent cap in October 2022. The policy was supposed to be a short-term measure to support tenants through the cost of living crisis.

However, the cap was extended and, while it ended earlier this year, a temporary framework of rent controls is still in place while the SNP finalises the Housing (Scotland) Bill, which aims to make the rent controls fully permanent. The Bill is expected to come into force in 2025.

The head of the British Property Federation warned last week that the rent controls had made Scotland a “no-go” zone for investors.

Investment in build-to-rent properties in Scotland slumped 71 per cent last year, according to Savills data, and there have been no deals in the sector so far this year compared to deals worth £555 million across the rest of the UK.

SNP ministers declared a “housing emergency” in May but the announcement was not accompanied by a new plan to fix the crisis and did not trigger any special powers.

Miles Briggs, the Scottish Tories’ shadow housing secretary, said: “After 17 years of SNP inaction, Scotland is facing a housing emergency, yet the SNP have totally failed to address this crisis, leaving thousands of Scots stuck in temporary accommodation.”

He added: “Despite rent control schemes not working anywhere else in the world, the disastrous SNP-Green coalition – backed yet again by Scottish Labour – ploughed ahead with the flawed policy anyway.”

Mark Griffin, Scottish Labour’s housing spokesman, said: “Far from taking the urgent action needed to fix this crisis, the SNP has fuelled it. While housebuilding plummets once again, the SNP is ploughing ahead with its disastrous plans to slash funding for affordable housing.”

The figures disclosed that the highest number of private sector homes being completed were in Midlothian, East Lothian and West Lothian – in and around Edinburgh – with a rate of more than 54 homes being finished per 10,000 people.

But the lowest rates were recorded in Angus, Stirling, South Ayrshire, Falkirk, North Lanarkshire, Argyll and Bute, Dumfries and Galloway, East Dunbartonshire, West Dunbartonshire, Clackmannanshire, Inverclyde and the Scottish Borders. Only 18 or fewer homes were completed per 10,000 people in these areas.

Paul McLennan, the SNP’s Housing Minister, said: “I recently outlined the Scottish Government’s plan to tackle the housing emergency with three key pillars forming part of our approach: more high quality, permanent homes, the right homes in the right places and a permanent home for everyone.”

He also blamed the UK Government, saying that the SNP administration’s capital funding was being cut by nearly 10 per cent.

Dire statistics

Jane Wood, the chief executive of the house building trade body Homes for Scotland, said: “On the basis of the figures released today, the people of Scotland deserve more than platitudes and excuses.

“Our own research also highlights the decline of [small and medium-sized] home builders and thousands of new homes now stalled across the country as a result of affordable housing budget cuts.”

Sally Thomas, the chief executive of the Scottish Federation of Housing Associations, said: “Today’s dire statistics should serve as yet another wake-up call to the Scottish Government about the extent of the housing emergency and the immediate challenges we face in delivering affordable rented housing.

“Starts and completions of new homes are down in every sector and it’s clear we are seeing a collapse in housebuilding.”