Cost of building Falkirk council house soars to over £200,000

A report to Falkirk Council’s executive has revealed that the cost of a new-build home per property has significantly increased since 2014, when the average spend was £144,823.

But the most recent projects at sites in Torwood and Main Street, Bonnybridge are an average of £209,404 per house – and that is projected to rise to £236,086.

Director of housing, Stuart Ritchie, said: “Costs are increasing and we expect to see them increasing again.”

For Falkirk Council, that’s a significant jump as it is currently expecting to build 568 new homes over the next five years.

That was announced as part of a package that will also include 400 buy backs and 641 new homes that housing associations plan to build, to create more than 1600 new affordable homes over the next five years.

The council is seeking a contribution of £98 million from the Scottish Government to support this.

But councillors heard that with such soaring costs there may need to be a greater shift to looking at using more ‘buy backs’ of former council houses.

However, while these are certainly much cheaper, they are also seeing major price increases.

When the scheme was introduced, in 2013/14, the average cost was £56,935 – this year so far the average cost is £94,141.

The Scottish Government’s grant recently rose to £35,000 for each house.

The problem is far from unique in Falkirk. In recent years, the construction industry as a whole has had major Issues with supply chains.

The report quotes the ‘State of Trade Survey’ from the Federation of Master Builders, which says that the recovery from the pandemic is “being curtailed by a long-lasting crisis in the price and availability of vital building materials and that 80% of their respondents were forced to raise their prices in the past quarter”.

The real question now for Falkirk Council is whether we now have to accept that the increased costs will be permanent as things show no signs of settling down.

The SNP’s housing spokersperson, Gordon Hughes, said that despite the huge challenges facing the industry, the report was “realistic and flexible”.

He said: “No-one can predict exactly what the future holds for the construction industry.

“However, we should always be positive in our thinking and ambitious in our outlook.”

Conservative group leader James Kerr asked if it would not be cheaper “just to get a national housebuilder to build them and buy them off them”?

Mr Ritchie said there were lots of things they were looking at in response to the situation and this might be something they would have to look at if prices continued to rise.

But he said it was important to note that the standards that council houses were built to are exceptionally high – often much higher than private housebuilders.

This includes corridors and rooms are built wide enough for comfortable wheelchair access, triple glazing and high quality fittings.

“The idea is that if we spend now, we save money down the line. I think they are very high quality and that is a good thing,” said Mr Ritchie.