New figures released by the Federation of Master Builders (FMB) has revealed that the availability of land is the most important constraint holding back local housebuilders from building new homes.
The figures come from the FMB’s 2021 House Builders’ Survey, which suggested that this year, 63% of small builders were limited in their ability to build the homes needed due to a lack of available and viable land.
Meanwhile, 62% said they were also struggling with material shortages, followed by reports of feeling held back by the planning system (61%) and a lack of workers needed to build homes (53%).
Furthermore, the survey also indicated that buyer demand is at a survey high, picking up on behaviour change prompted by the pandemic. Subsequently, with homeowners seeking more space or moving out of cities, builders are reporting a booming demand for new homes.
However, with just 12% of new housing delivered by small builders, compared with 40% in the 1980s, more must be done to diversify the housebuilding market away from its overreliance on a few volume developers.
This years’ FMB House Builders’ Survey’s key lessons for government, local government, and Homes England are:
- Ensure nationwide compliance with planning guidance that says 10% of housing needs should be on sites no larger than one hectare.
- Provide greater resource to local planning departments and encourage better engagement between planning departments and small- to medium-sized enterprises (SMEs).
- Carefully calibrate the proposed Infrastructure Levy so it doesn’t affect the viability of the smallest sites and the SME house building sector.
Commenting on the findings, Brian Berry, chief executive of the FMB, said: “Demand for new homes is soaring, but the decline of the small housebuilder has hit the capacity, competitiveness and diversity of the housebuilding industry, and is slowing down delivery. We will fail to sustainably deliver 300,000 homes a year unless we take action to reverse this trend.
“Builders can’t build if they don’t have the land, and the FMB House Builders’ Survey 2021 sends a clear message. With 71% of small builders reporting the decreasing number of small site opportunities, and only 19% feeling a high level of certainty over the outcome of planning applications, these constraints are proving stubborn to shift.”
Brian concluded: “It is not all gloom, however. Improvements in access to finance are welcome, and recent government commitments to expand access to the self and custom build market will give small builders a boost.”
>> You can read more from the FMB in the news here.
