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Published: 16/01/2024
Tender prices for social housing in Scotland started to fall in the second half of 2023.
According to the Scottish Social Housing Tender Price Index (SSHTPI), tender prices fell 2.0% in 3Q2023 compared with the previous quarter, but were still up 3.6% compared with 3Q2022. This is the first fall in prices since the middle of 2020 and reflects a downturn in construction output from the housing sector in Scotland, and GB as a whole.
Source: Scottish Government, Office for National Statistics
Underlying construction costs of labour, materials, and plant, as measured by the BCIS General Building Cost Index (GBCI), rose 1.8% quarter-on-quarter in 3Q2023 and by 2.5% compared with the same quarter a year earlier.
Tender prices are driven as much by demand as by resource costs. The SSHTPI has tended to reflect the trend in demand from the housing sector. Scottish housing output fell 7.0% in 3Q2023 and 15% over the previous year. Over the same periods, total GB housing output fell 2% and 12%.
Over the year to 3Q2023 underlying inflation, as measured by the Consumer Prices Index (CPI), rose by 6.7%.
The SSHTPI is prepared by the Building Cost Information Service (BCIS) for the Scottish Government More Homes Division. Further details at https://www.gov.scot/publications/scottish-social-housing-tender-price-index-sshtpi-quarterly-report/
