Housing market snapshot highlights blight of homelessness

The quarterly Scottish Housing Market Review has just been published and provides a fascinating and disturbing snapshot of all parts of the sector from homebuyers to renters, housebuilders to the homeless. In terms of homebuyers the figures are very positive, recording 98,674 sales for the whole of 2024 which was a 5.4 per cent increase on the previous year and 5.7 per cent above the 2010-2024 average. This trend has continued with sales in the first two months of 2025 8.6 per cent higher than the corresponding months of 2024.

Accompanying these high sales are rising prices with the Office for National Statistics recording a 5.3 per cent annual increase for Q4 2024 which was the fourth consecutive quarter of positive annual house price growth and the highest growth rate since Q3 2022.

The number of mortgages provided to first-time buyers (FTBs) in Scotland rose by 16.1 per cent in 2024 and for existing home movers the rise was 13.7 per cent. The loan to value (LTV) ratio for FTBs was 82.7 per cent in the final quarter of last year, which is near to its 83.4 per cent peak in Q2 2022. For home movers the ratio is 69.3 per cent, which is 3.4 per cent below its Q2 2022 peak of 72.7 per cent.

The fall in interest rates has improved affordability and the number of buyers in arrears or facing possession has also fallen.

For the private rented sector (PRS) there is a gloomier outlook, with the annual rate of new let rents recorded by the Citylets Rental Index falling from a peak of 13.7 per cent in Q3 2023 to 6.2 per cent in Q4 2024. This decline in new let rents is undoubtedly contributing to the enormous demand for properties in the PRS which continues to far exceed supply.

Housebuilding supply remains subdued with 19,797 all sector newbuild completions, which was a drop of 7 per cent on 2023 while starts were down 9 per cent at 15,050.

Last year there was a decrease of 18 per cent compared with 2023 in affordable housing supply programme completions, with numbers dropping to 8,180.

All of which leads to the most disturbing statistics of all – the blight of homelessness impacting upon tens of thousands of Scots. Homeless applications in the year to Q3 2024 were up 2.2 per cent compared to the preceding year while the number assessed as homeless rose by 2.9 per cent over the same period.

The number of households in temporary accommodation stood at 16,634 by the end of the third Q3 2024 with 10,360 children living in these homes.

All of these figures provide us a with a detailed picture of the Scottish housing market but there needs to be lessons learned from this data. If we are ever to deal with the current housing emergency, we need more homes to be built for the private and social housing markets and greater support for the expansion of the private rented sector.

Only by initiating major investment in new housing and encouragement for investment in the PRS will we start to address the underlying issues causing the current housing emergency. It surely cannot be acceptable that over 10,000 children are living in temporary accommodation in a country as affluent as Scotland. The homeless figures highlight a broken system which needs leadership, greater support for the housing sector, and substantially more financial investment.