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02/12/2014

Government offers help to small house builders

Words: Laura Edgar

Communities minister Eric Pickles has cut the cost of building a house for small builders by as much as £140,000.

The move, the minister says, will help to restore the sector, boosting local jobs and construction.

The announcement follows a call by the Home Builders Federation (HBF) last week to support small builders and get them back into business.

The plans reveal that S106 charges should not be asked of the smallest house builders, especially if their sites consist of 10 homes or fewer, on self-builds or extensions.

In addition, Pickles announced funding of £25 million to improve development finance for small builders.

He said: “Small builders are being hammered by charges, which have undermined the building industry, cut jobs and forced up the cost of housing. By getting rid of these five and six-figure charges, we will build more homes and help provide more low-cost and market housing.”

With some councils charging up to £145,000 on single properties, the government estimates that the policy will save an average of £15,000 in S106 charges per home in England, while it is hoped that savings will total six-figures for small developers in some parts of the country.

Speaking to The Planner, Stewart Baseley, executive chairman of HBF, said: “If we are to deliver further and sustained increases in housing supply it is vital we get more smaller builders building again. Smaller companies are disproportionately penalised by the overly bureaucratic regulatory and planning systems. Over the last couple of decades the loss of smaller builders from the industry can be linked directly to the increase in complexity and the costs associated with obtaining a planning permission. Although there is still a long way to go, it is encouraging to see politicians getting to grips with the red tape that strangles too many small and medium-sized house builders, preventing growth and putting them out of business.”

Image courtesy of the Department for Comunities and Local Government

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