Barriers to small house builders need to be removed to deliver housing targets

The Government needs to do more to remove the barriers to small to medium-sized (SME) house builders if its housing targets are to be met, says the Federation of Master Builders in response to the House of Commons Public Accounts Select Committee report, ‘Planning and the broken housing market’, published today.

Brian Berry, Chief Executive of the Federation of Master Builders (FMB), said:

“SME house builders are continuing to face numerous barriers to increasing their capacity to build the homes that are needed. The recommendations in the Public Accounts Committee’s report highlight that the planning system is delaying progress. It is completely unacceptable that sites are being stalled because planning departments are not dealing with applications quickly enough. Our members aren’t seeing any improvements in service since fees were increased in January last year – a policy the FMB supported.”

Berry continued:

“The report finds that, as of December last year, only 42 per cent of local authorities had an up-to-date local plan which is truly disappointing. By allocating small sites for housing delivery in their local plan, local authorities will be reducing the burden of uncertainty for the nation’s small house builders, and therefore speeding up housing supply through better diversifying the sector. Furthermore, we must not forget the highly positive impact that these local businesses have on their areas, offering employment and training opportunities to local people.”

Berry concluded:

“Access to finance for SME house builders has undoubtedly improved over the last few years but the loan to cost ratio from most lenders is simply unviable for SMEs – especially the micro firms, building fewer than five units a year. The FMB House Builders’ Survey 2018 found respondents estimated that they could increase their out by 38 per cent if they could achieve a loan to value/cost ratio of 80 per cent. Government must work with the finance sector to understand how lending to small house builders can be increased and improved. The time is now for the Government to heed to warnings of the Public Accounts Committee.”