Land and lending shortfall hindering UK housebuilding, says FMB

New research, conducted by the Federation of Master Builders (FMB), has unearthed a potential land and lending shortfall, which is preventing SME housebuilders from delivering much-needed housing stock.

The findings themselves form part of the FMB House Builders’ Survey 2017 – a yearly appraisal of the UK housebuilding sector from an SME perspective.

Apparently, more than half (54%) of all SME housebuilders surveyed felt access to finance was a barrier to building new homes – up from 50% last year. A shortage of viable and available land was the most commonly cited obstacle (62%) however, with 54% saying that opportunities for small site development were dwindling.

Overall, 42% of small housebuilders surveyed said the skills shortage was impacting their output. That figure rose to almost half (49%) when SMEs were asked to look ahead over the next three years. Around one in three organisations that employ EU workers believe their ability to build more homes will be hampered by the end of free movement.

Meanwhile, half (49%) of SME builders view the planning system as a major constraint and the “inadequate resourcing of planning departments” was again cited as the most significant cause of delay during the arduous planning process.

According to Brian Berry, Chief Executive of the FMB: “The results of the FMB House Builders’ Survey suggest a slight worsening in the problems these firms face in accessing the finance they need to build. Assessments of lending conditions to SME developers were down slightly from 2016, the first fall in this measure since 2013.”

“Our research also affirms just how vital it is that the Government acts on key proposals in the Housing White Paper, published earlier this year and designed to increase the opportunities for smaller scale development,” continued Mr Berry. “Nearly two thirds of SMEs say that the lack of available and viable land is a major barrier to increasing output, the most commonly-cited barrier for the third year in a row. More worryingly still, over half say that the number of available small sites is, if anything, decreasing.”

Regarding Brexit, Mr Berry concluded: “Over the next three years, half of SME housebuilders believe skills shortages will act as a major constraint on their ability to grow and this concern is now beginning to overtake more typical frustrations such as the planning system. If we get it wrong, Brexit and the end of free movement could further exacerbate the skills shortages we already have.”

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