Home building 'could drop by 20%'

http://news.bbc.co.uk/go/rss/-/1/hi/scotland/7469712.stm

Version 0 of 1.

The number of new homes being built in Scotland could slump by a fifth this year, according to house-building group Homes for Scotland.

On average, 24,000 homes are built each calendar year but it is predicted that building output will be down by between 10% and 20% this year.

Andy Pearson, managing director of Tweed Homes, said the "wheels have come off" the sector since April.

He said many firms were now mothballing building sites and laying off staff.

Mr Pearson added that solicitors were also being overly cautious.

Credit crunch

He told BBC Scotland that legal firms had been generally advising clients to sell their homes before buying a new one. This was leading to a logjam in the market.

"Over the last couple of years we have had quite a good time of it - our properties have sold very well," he said. "And we still continue to attract interest.Jonathan Fair of Homes for Scotland said consumer confidence had waned

"However there has been a downturn and this has really been caused by very concerned householders not wanting to commit to a sale."

Jonathan Fair, chief executive of Homes for Scotland, which represents housing developers, said: "We have found over recent months in particular that consumer confidence has certainly waned as the credit crunch starts to bite within the general marketplace.

"Clearly in relation to homebuilder member companies they need some clear, concise, consistent signals within the marketplace to continue to develop the new homes that Scotland needs.

"And until that confidence returns it makes it extremely difficult for them to make sensible investments for the future."

The Scottish Government has set a target of building 35,000 extra homes every year by 2015.