We must not let two-tier housing market develop

The latest statistics show too few newbuild properties are being built across the country, writes David J Alexander.

Twenty-six months after the Scottish government declared a housing emergency the latest newbuild statistics continue to paint a picture of a sector in decline.

To address the current housing shortage the minimum requirement must be to build more homes. Yet the latest quarterly housing statistics reveal a further drop in the number of newbuild starts.

In the latest financial year from Q2 2025 to Q1 2026 the number of all sector newbuild starts fell by 4.4 per cent from 15,648 to 14,955, which is a drop of 693 properties and is the lowest 12-month figure since 2012/13.

The drop in private sector newbuilds was the most shocking as it contributes around three quarters of all new homes. This number fell by 1,483 (-11.9 per cent), falling from 12,501 to 11,018, which is the lowest annual figure since 2013/14. The data for the social housing sector shows an increase of 25.1 per cent, rising by 790 from 3,147 to 3,937 and, while this is the highest annual figure since 2022/23, it is the third lowest in the last 11 years.

Of further concern is that there is a wide disparity in the volume of newbuilds by area, with some parts of Scotland barely building and others experiencing a boom. Edinburgh has the highest number of all sector newbuilds at 1,850, which is 12.4 per cent of the Scottish total. Glasgow city, however, only had 831 newbuild starts, which is just 5.6 per cent of the total. Twenty years ago, Glasgow had the largest number of all-sector newbuild starts at 5,531 (19.1 per cent of the total) in one 12-month period.

Furthermore, the combined newbuild starts for Edinburgh, West Lothian, East Lothian, Midlothian and Fife – which all feed into the capital’s economy – reached 5,769 in the latest financial year, which is 38.6 per cent of the total. With so much newbuild activity concentrated in and around Edinburgh we are at risk of creating a two-tier housing market, with the capital and its surrounds growing rapidly while other areas are left with low growth.

The continued and growing decline in private sector housebuilding numbers is a clear sign that this market is slowing down and, at 11.9 per cent lower, is a serious issue if housing shortages are to be met. That the figures for 2025-26 are substantially lower than even the numbers during the Covid years is a terrible indictment of a sector that badly needs greater support but is struggling to receive it. While the improving social housing numbers are positive this is still the third lowest annual figure in over a decade and is coming from such a low base that the only way is up.

At a time when more homes than ever are needed to meet growing demand in Scotland across all tenures it is essential that everybody engaged in the housing market is consulted and their views acted upon to increase the volume of newbuilds in the country. The views and voices of builders, investors, landlords, agents, governments, trade bodies and official housing organisations must be listened to if we are to develop a quick, effective and functioning solution to this rapidly growing problem.

Scotland needs more homes, and it needs them now.