The number of households in England, is growing at the rate of over 220,000 per year, but worryingly, the last time more than 200,000 homes were built in a single year in England was in 1988, with only 124,520 new homes built in 2014/15.
To enable growth in output among existing firms, an increase in new entrants to the industry and to make better use the of the large numbers of skilled small contractors who would have the capacity, a number of major barriers
need to be addressed. These barriers and structural constraints are feeding into this serious loss of capacity in UK house building.
Issues which continue to effect SME house builders, have been pinpointed as follows:
– Access to finance for small developers and new entrants
– The availability of suitable and viable small sites
– Disproportionate cost, complexity and delay in the planning system
– Excessive demands for developer contributions placed on small sites
The FMB conducts a yearly survey of its house builder members – and this year’s results make for an interesting read with regards to these points.
Key findings from the survey include:
– Two-thirds of SME house builders cite a ‘lack of available and viable land’ as the biggest barrier to increasing numbers
– Half of SMEs see the planning system and difficulties accessing finance as other serious challenges
– 40% believe the construction skills crisis is now presenting a major impediment to building more homes
– The under-resourcing of local authority planning departments is the most important cause of delays in the planning process
– A high proportion of SMEs believe that consumer demand for new homes remains resilient, even in the wake of Brexit
Brian Berry, Chief Executive of the FMB, said:
“The biggest challenge facing SME house builders is the planning process. Councils need to find a way of allocating and granting planning permission for more small sites. The current focus on large sites is squeezing out smaller developers, which is reducing competition in the housing market at a time when we need more, not less, choice. The limited supply of opportunities for small scale development is one of a number of key structural constraints that has seen the number of homes built by SMEs decline from around two thirds in the late 1980s to less than a quarter today.”