SME Problems

The Federation of Master Builders (FMB) House Builders’ Survey 2020, has tracked the experience of SME house builders in England. The survey found:

• Buyer demand fell to its lowest levels in six years
• 48% of respondents said that ‘the planning system’ was restricting their ability to build new homes. Anecdotal evidence suggests builders are typically waiting one year for a decision on a non-controversial planning applications
• 46% said they had concerns over a ‘lack of available and viable land’ to build on
• 41% said access to finance is a growing concern, specifically lending conditions and an increase in loan refusals.

When asked to look ahead over the next three years, 37% of SMEs are concerned about the impact of restricted mortgage availability and what this will mean for prospective house hunters. FMB’s House Builders’ Survey sets out three key priorities for SME house builders over the year ahead:

• Boost resources for local authority planning departments – to help builders bring forward new sites, and lay the foundations for the government’s ambitious reforms to the planning system currently under consultation
• Improve flexibility in the Government’s Home Building Fund – the survey found no SME house builders currently use this dedicated funding pot for small site development. This will help unlock additional new homes and help meet the target of building 300,000 new homes a year
• Extend the Stamp Duty Land Tax Holiday when it ends in March 2021 – to help sustain increased levels of buyer demand over the longer-term. This will maintain activity levels in the sector and help with job retention.

Brian Berry, Chief Executive of the FMB, said: “SME house builders are facing the dual challenge of weakening demand, and increasing constraints on their output. Taken in the context of Brexit uncertainty and the ongoing economic impact of the coronavirus, these conditions are hampering recovery in the housing market.”

“The government needs to prioritise supporting recovery in the SME house building sector. SME builders operate in every community in England and support the government’s levelling-up agenda. They build high-quality, sustainable and beautiful homes in places where people want to live. Local builders also create local employment and training opportunities, as SMEs train almost three-quarters (71%) of the industry’s apprentices. The FMB is keen to work with the government and the industry to reverse the decline in the SME house building sector and create a more diversified and resilient industry.”

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