SME House Builders Can Help Tackle the Housing Crisis, says FMB Wales

Thursday 24th May 2012 – FOR IMMEDIATE RELEASE

SME House Builders could help tackle the housing crisis says the Federation of Master Builders (FMB) Wales in response to the Welsh Assembly Government’s Housing White Paper.  

Richard Jenkins, Director of FMB Wales, said:
“The scale of the housing problem is now so enormous in Wales that we need to double the supply of new homes over the next 20 years, if we are to meet rising demand. If the Welsh Assembly Government is serious about dealing with the housing crisis it is going to have to take bold and decisive action to get small house builders back into the market.”

Jenkins continued:
“Since the 1980s the number of small and medium-sized house builders has been steadily decreasing and yet they are often best placed to deliver choice in the types of homes built in local communities. Small builders are also the most prolific in Wales, with 94% of firms employing no more than 14 people. Research from the London School of Economics (LSE) also suggests that there are sufficient micro sites within our existing towns and cities to satisfy our housing need. However, to exploit these, a healthy SME house building sector is required. The problem is that FMB research also shows that these sites are around 70% more expensive to build on than larger developments. The procurement strategies and land release policies of most local authorities and other public sector organisations in Wales are geared towards the large contractors.”

Jenkins added:
“The Government’s proposed introduction of a new scheme to provide 95% mortgages for first-time buyers of new-build homes is a welcome step as availability of mortgage finance is a key issue killing off housing demand. Typically a mortgage now requires a 20%-25% deposit with the result that the average first time buyer is now aged 37.  Last year only 15% of mortgages required a 10% deposit as compared to 40% before 2008.”

Jenkins concluded:
“It is also pleasing that the Welsh Assembly’s white paper recognizes that a good portion of the homes needed in Wales can be created by bringing empty properties back into use. The introduction of legislation to provide local authorities with a discretionary power to levy a higher rate of council tax on properties that have been empty for more than a year is something the FMB called for in its 2011 “Building for Success” programme. It is regrettable that the Welsh Assembly is unable to enact its policy of cutting the rate of VAT from 20% to 5% as this would help boost the renovation of these properties and help increase the housing supply within a very short time but we continue to urge the UK Government to listen again to the arguments made by politicians in Wales and cut VAT on home maintenance and repairs.”