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Would Small Sites and Small Builders Deliver New Homes Faster?

According to the Federation of Master Builders (FMB), the best way to deliver needed housing more quickly is to enable more small builders to rejoin the market and emphasise the potential of small build sites.

FMB Chief Executive Brian Berry responded to the Prime Minister’s speech on housebuilding in Britain by saying that small build sites are generally completed more quickly and smaller builders, who tend to be more concerned about short-term financing, have a strong incentive to build and sell quickly. If smaller developments receive more opportunities, the result could be a more diverse market, increased capacity, and faster delivery.

Mr. Berry said that the government has evidently recognised this fact and is putting forth national planning policy changes that will make it easier for more small build sites to be used. The FMB is especially appreciative of the move to ensure that smaller sites account for at least 20% of the sites earmarked for housing in local authority plans.

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He pointed out that the pace of housebuilding cannot be dictated. Builders have little incentive to simply sit on land. Smaller builders, in particular, have a good reason to build and then sell as quickly as possible, so they can recoup their investment and move on. There are valid reasons why developments can be slowed down or stalled, such as financing problems and downturns in the market. Building a home is an important investment and builders who can’t be sure of selling won't stay in business for long.

Mr. Berry concluded that developers with a poor delivery track record and those who apply for planning permission purely on a speculative basis deserve push back, but the UK Government needs to prevent rhetoric from dominating reality. It must recognise that any attempt to compel building at a commercially illogical speed could end up slowing down the rate of delivery. This outcome could discourage the newer and smaller builders needed to diversify the market.

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