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Navigating the Future of Scottish House Building: Taking a New Approach

Posted: 13th September 2023

Steven Simpson is the Managing Director of the Cruden Group

As we mark Scottish Housing Day it gives the chance to reflect on the changing landscape of the country’s house building sector; the challenges it is currently facing and the opportunities that lie ahead.

Undoubtedly the industry has encountered a very turbulent time. In the affordable housing market, delivery is being significantly impacted by soaring inflation on build-costs with many projects deferred.  Furthermore, against a backdrop of long standing, fixed-price affordable housing contracts, contractors’ margins have been eroded by rocketing material and labour costs and a reduced supply chain.

Meanwhile, the external economic environment has recently brought tough challenges to the private housing market. The cost-of-living crisis has softened demand for new homes due to increased price sensitivity, as prospective buyers factor in rising interest rates on mortgages, inflation, and energy bills.

They say ‘the only safe ship in a storm is leadership’. During Cruden’s rich history of over 80 years of Scottish house building and development, we’ve weathered many economic storms and demonstrated corporate agility in the face of fast paced political, social and regulatory change.  In fact, our ability to pivot in reaction to changing market conditions has been a hallmark of our achievement. Now, once again, we are adapting our strategy for long-term success.

The delivery of new homes for private sale remains a core part of our growth plans, but our focus on the affordable housing market is shifting towards the provision of land-led affordable housing in collaboration with partner organisations. Whilst we will continue to engage in negotiated construction contracts, a move away from the conventional tender model will ensure a more collaborative, development-led approach that enables us to work closely with local authorities and housing associations, whilst rebalancing risk and reward. This method also enables us to identify suitable opportunities for much-needed affordable housing and deliver bespoke design and build solutions that cater to the specific needs of communities.

Our commitment to working collaboratively with various stakeholders, including local authorities, housing associations, and the communities we serve, helps create a lasting impact on Scotland’s housing landscape. In re-planning our organisational structure to bring our house building and contracting divisions together, I firmly believe we are well placed to deliver our strong pipeline of both private and affordable housing projects throughout central Scotland.

The theme of this year’s Scottish Housing Day is ‘Celebrating Housing as a Career’, and our new strategic approach enables us to leverage our talent pool across both our private house building and affordable housing projects and presents an exciting opportunity for our workforce to thrive under a one-team approach to collaboration, expertise, resource and insight. I’m confident our diverse range of roles and career paths will foster innovation and efficiency across Cruden’s many active and planned, multi-tenure developments across the country.

Challenges are inevitable, but they also present opportunities for reflection, growth and innovation.  Resilience and optimism have always defined our industry and Cruden is in great shape to react dynamically to help deliver a more promising future for Scotland’s housing market. I look forward to the potential for further positive change and growth in the industry and I am excited for Cruden to continue to play our part in building a better Scotland for all.

Business Comment

Business Comment is the Edinburgh Chamber of Commerce’s bi-monthly magazine. It provides insight on Edinburgh’s vibrant business community, with features on the city’s key sectors, interviews with leading figures and news on new business developments in the capital.
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