Over the past 25 years, the house building market has been dominated by major builders, while the number of SME builders has reduced by approximately 80%.

A recent report from the Home Builders Federation (HBF) detailed the barriers that SMEs face in developing housing and sets out a range of proposals to address this issue.

We cut through the jargon to give you the low down on the top barriers facing SMEs and ways in which the government could help.

What barriers do SME house builders face?

The report is based on the views of HBF’s smallest members and highlights access to finance, and the increasingly complex planning and regulatory systems as the biggest factors preventing smaller companies from producing homes.

HBF executive chairman Stewart Baseley said: “Whilst housing output has increased significantly in recent years, the vast majority of the increases have come from larger companies. The number of smaller builders has collapsed over recent decades with few new entrants to the market able to grow to any size.”

“If the government wants to see continued increases in supply it is imperative it enables SME builders to play their part. Removing the barriers for SME builders could result in tens of thousands of desperately needed more homes being built and boost economies up and down the country.“

How can the government help to tackle these issues?

The report highlights the following steps the Government could take to help:

  • The creation of a new Help to Build scheme to help extend sustainable lending to smaller companies
  • Tackling specific planning problems including; the lack of smaller sites and the impact of pre-commencement conditions
  • Lift barriers for builders to access tax incentives and other support enjoyed by SMEs in other sectors
  • Provide technical and planning advice services for new businesses
  • Seize the opportunity of Brexit to reform EU regulation; reducing the risk and complexity associated with building new homes.

For more information on this topic see our article on Top 3 barriers facing SME builders.

By Olivia Catterall