New research from the Federation of Master Builders (FMB) has revealed that two thirds of SME house builders are struggling to identify land for development.
For the second year in a row, the FMB’s annual House Builders’ Survey has shown a lack of available and viable land as the biggest barrier to SMEs delivering more new homes.
The survey of FMB members also revealed that half of SMEs see the planning system and difficulties accessing finance as other serious challenges and a further 40% believe the construction skills crisis is now presenting a major impediment to building more homes.
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.
“SME house builders must be seen as a key component of the Government’s housing strategy. This means a renewed focus on granting planning permission to small sites. At the same time, the Government needs to press ahead with its proposed planning reforms, including a presumption in favour of small scale development. Planning departments also need to be adequately resourced so that they have the capacity to engage more closely with SME house builders and ensure planning applications are processed through the system as speedily and efficiently as they can be.”