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Smaller House Builders Fighting to Source Land for New Homes

A new poll has revealed that small and medium-sized housebuilding firms are having a difficult time finding land to build on, making the new home shortage even worse.

A Federation of Master Builders survey revealed that 67% of small and medium-sized housebuilding enterprises face a lack of available and usable land as their biggest obstacle for the second year in a row.

Other challenges included accessing finance and negotiating the planning system, both of which were cited by 50% of the survey respondents.

Many property industry participants are waiting for November’s Autumn Statement, which is expected to include steps to assist smaller housebuilding firms.

Shelter and Capital Economics recently released a report recommending a ‘help to build’ policy to help smaller housebuilders, facilitating access to development finance and land. Without such measures, the report added, the UK government would not be able to reach its target of a million new homes by the end of the decade.

The National House Building Council stated that small- and medium-sized firms (SMEs), which it defined as those constructing less than 500 homes per year, build two-thirds of all new properties during the late 1980s.

Several of these firms were pushed out after the 2008 crash and never resumed operations. Today, only 26% of new properties are built by SMEs, compared to 44% in 2008.

According to recent data, the number of SME builders have not fallen in recent years, but there is no sign of a resurgence to the pre-crash figures.

The Federation of Master Builders, which primarily represents smaller construction companies and housebuilders, found that a skills shortage was a major concern for 39% of firms reporting concerns, compared to 27% the year before.

FMB chief executive Brian Berry said that the planning process is the biggest challenge facing SME housebuilders. Councils had to determine a method of distributing and granting planning permission for more small build sites.

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Mr Berry said that the present focus on bigger sites was preventing smaller developers from competing in the housing market at a time when more choice is needed.

Chris Carr, joint managing director at Lincolnshire SME housebuilder Carr & Carr, said that local authorities are not presently allocating enough smaller build sites in their plans. Bigger, strategic sites that can only be worked with by larger builders are being favoured instead.

Mr Berry added that this year’s Housing and Planning Act and other efforts to eliminate red tape have not been sufficient. He said that it was absurd that the planning system treats a three home application and a 300 home application the same way.

He pointed out that 95% of SME housebuilders have reported that the demands placed on them during the planning application process have either gone up or remain as dismal as they were in the past.

The FMB survey, he said, shows that the principal cause of undue delays is the planning process, with the reduced personnel in the planning departments being the primary concern.

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