More homes are being built in Scotland but many more are needed to keep up with demand, according to a new study.

Research by the Fraser of Allander Institute for Homes for Scotland found that housing supply has varied across Scotland. In 2018, housing completions exceeded 20,000 for the first time since the financial crash.

But Homes for Scotland (HFS) estimates that 25,000 homes are needed each year to keep up with housing demand, not including the 80,000 shortfall in the supply of housing since 2008.

Whilst this growth is encouraging, given economic and political uncertainty, it remains fragile – a point Fraser of Allander reinforces with the fact that between 2008 and 2018 the overall economy saw three per cent growth, a stark contrast to the 20 per cent seen in the 10 years prior to 2008.

The research has been published as Homes for Scotland holds its annual conferences which draws together about 200 member organisations from the industry.

HFS chief executive Nicola Barclay, will say to conference delegates that: “It is absolutely vital that steps are taken to ensure housing demand can be met, and to avoid exacerbating the existing undersupply of homes.

“Home building provides huge social and economic benefits and is a key area for growth in Scotland.

“Increasing supply to pre-recession levels of 25,000 homes per year would generate a further 19,000 jobs, £0.5 billion more in economic output and over £25 million in local infrastructure enhancements.”

The Fraser of Allander report shows there are significant variations in the level of growth across different areas of the country. Much of the growth has been driven from activity in the east of Scotland, consistent with wider trends across the Scottish economy.

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House price growth is also inconsistent across the country. Whilst prices in Scotland have continued to grow over the last year, rising 1.3 per cent to January 2019, the level of growth is much stronger in certain areas like Edinburgh (six per cent over the year), in comparison to much lower levels of growth in other areas of the country, such as Aberdeen ( minus 7.9 per cent).

The Fraser of Allander research considers a number of “grand challenges” for housing: population change, economic growth, technological change, climate change, productivity and tackling inequalities.

Professor Graeme Roy of the Fraser of Allander Institute said: “The Scottish economy continues to show a positive but relatively fragile level of confidence.

“House prices continue to grow, and the construction sector has picked up in recent years. Brexit uncertainty looks set to continue with the departure date now in early 2020. This continued uncertainty will impact negatively on investment and consumer confidence.

“It is important not to lose sight of the major challenges and opportunities that are coming down the line and which will shape the future direction of our economy – and the demand for housing – far more than any short-term uncertainty or constitutional change.”

The news came as Bellway’s Scotland West division has announced plans to build close to 1,000 additional new homes.

The housebuilder is investing in eight new sites creating a further 887 private new homes and 66 affordable new homes.

The landmark investment in 92 acres of land will see the company increase the number of live developments from nine to sixteen, subject to planning permission, over the next six months, with a target of 20 by the end of 2020.

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