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12/09/2017

Lack of small sites a top barrier to new homes – survey

Words: Laura Edgar
New housing / Shutterstock

Latest research by the Federation of Master Builders (FMB) suggests that a lack of available small sites and finance are the main barriers to small and medium-sized (SME) housebuilders increasing their delivery of new homes.

The FMB’s House Builders’ Survey 2017 was launched in the House of Commons this morning.

According to the survey, which received 124 responses from SME firms during August 2017, 54 per cent of small housebuilders say accessing finance is a major barrier to their capacity to build more homes – an increase from 50 per cent in 2016.

A lack of available land that is viable was cited as a barrier by 62 per cent of respondents, making it the most common obstacle to increasing output. On top of that, 54 per cent believe the number of opportunities for the development of small sites is decreasing.

The shortage of skilled workers is also proving to be a stumbling block – 42 per cent say this is a problem. Asked to consider the next three years, 49 per cent of respondents saw this difficulty ahead. One in three small housebuilders employing EU workers believes that the end of free movement of labour will be a major constraint on their ability to build more homes.

The survey also suggests that the planning system is proving to be a constraint on SME builders’ capability to grow, with 49 per cent citing it as a barrier. The lack of resources in planning departments is the reason given for the delays in the planning application process.

Brian Berry, chief executive at the FMB, said: "Almost a decade after the financial crisis, access to finance for small housebuilders is getting worse instead of better. The results of the FMB House Builders’ Survey suggest a slight worsening in the problems these firms face in accessing the finance they need to build. Assessments of lending conditions to SME developers were down slightly from 2016, the first fall in this measure since 2013. Small housebuilders express generally positive views of some recent government initiatives in this area, such as the Home Building Fund, but we clearly need to double down on these efforts to make sure that SMEs have access to the finance they need to build Britain out of its housing crisis.”

Berry said the study shows  how “vital” it is that measures proposed in the government’s housing white paper to increase opportunities for smaller-scale development are acted upon.

“We need the government to make good on its proposals to improve the availability of small sites and speed up the planning process for small sites.”

According to Berry, Brexit and the end of free movement could exacerbate the skills shortages the country is already experiencing. “It’s so important that the government introduces a transitionary period that allows the UK housebuilding sector to gradually wean itself off high levels of EU labour,” Berry concluded.


Read more:

House Builders’ Survey 2017 (pdf)

All about SME: an interview with Brian Berry

Small builders held back by land and planning resource scarcity


Image credit | Shutterstock

 

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