Small housebuilders are calling for more government support to help them deliver the homes the country needs, citing planning delays, a lack of affordable home providers and opposition from locals as the biggest barriers they face.
A survey of SME builders by Close Brothers Property Finance, the Home Builders Federation and Travis Perkins found that firms welcomed Labour’s introduction of planning changes but wanted to see further policy interventions to maintain momentum.
Two-thirds of SME builders said delays in the planning process, the previous government’s anti-development approach to housing and planning policy, and difficult economic conditions have made it harder to be a small developer today than it was five years ago.
The State of Play report 2024/25 revealed that 94% of SME home builders would like the government to do more to support them.
For the first time in the fifth iteration of the report, respondents were asked how they could be supported to deliver more sustainable housing.
The top response, cited by almost 60% of respondents, was ‘Homebuyer incentives’, such as a dedicated government support scheme for buyers of energy-efficient new-build homes.
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Barriers to building
More than half of SME housebuilders were waiting over a year to obtain planning permission, while 56% reported a 30% uplift in the cost of obtaining planning permission.
Meanwhile, 47% said a lack of land availability was a major barrier to development, while 80% of respondents identified obtaining suitable offers for S106 Affordable Homes to be a barrier to growth.
Neil Jefferson, chief executive of the Home Builders Federation, said: “SME home builders play a vital role in addressing the housing crisis, yet the mounting constraints on housing delivery in recent years have placed considerable strain on many small businesses.
“Recent planning changes are very positive, but there are a number of determinants on housing supply and government will need to pull additional policy levers if it is to achieve its ambitious housing target.
“Ensuring local authority planning departments have sufficient capacity to process applications efficiently is key. Government needs to do more to support prospective buyers, in particular young people, to access suitable mortgage finance. The suppressed level of demand reduces the industry’s ability to invest in new sites and its supply chain, and so accelerate the delivery of private and affordable homes.”
