The headlines confirm that the UK needs to produce 300,000 new homes a year, but one part of the construction sector has been overlooked in the strategy discussions. They are the small and medium house builders or SMEs.
At one time, SMEs built 40% of new homes. Now, thanks to competition from larger builders, more challenging public procurement processes, and the fallout from the financial crisis, they construct only one in eight new builds.
In 2013 the Federation of Master Builders (FMB) researched the matter and found that 41% of SMEs are successful when bidding for public sector projects less than 10% of the time. Consequently, smaller firms are now reticent about bidding for public sector work and even housing association contracts.
Last year the Home Builders Federation (HBF) estimated the bringing the total number of SME house builders to their pre-2011 levels could result in 11,000 more homes being built per year. Halton Housing Trust representative Paul Mullane said that housebuilding could become a limited opportunity unless SMEs are encouraged to flourish.
He warned that if things continue as they are, the UK will end up with five or six large companies that act as a cartel. SMEs are an important part of keeping the industry independent and competitive.