The housing crisis has long been a topic of discourse. We need to look beyond the big players in house building to build our next generation of affordable homes.
The current way of working towards ending the housing crisis and delivering affordable housing is not producing the results necessary and we are falling short of constructing the required homes that are essential in today’s UK market. We need to look for an alternative way of increasing the rate of houses being built by SME builders.
The Government’s target of creating up to 1 million homes by 2020 is looking increasingly unlikely and the need for SME builders to build on smaller plots is essential to reach their target.
In a recent study the number of SME house builders in operation have halved since 2007. That along with the current barrier to entry and constraints set upon SME house builders, a few of which include finance, viable sites, high cost & complexity in planning and excessive demands for developer contributions placed on small sites. All these lead to a potential decrease in the rate of building new houses.
There are a few things that can be setup to improve the current housing crisis and building more affordable housing:
Including, a new £3bn “Home Building Fund”, which combines several existing funds. £1bn of which will be made available as loan finance specifically to small and custom builders, which will help build 25,000 homes.
An “Accelerated Construction” programme, with £2bn reserved to fund it, to promote the use of unused public land for housing development. This includes larger sites that will be broken down into smaller plots specifically for SME builders. Councils should also be actively identifying and allocating more small sites for development, either on public or private land. With local authorities being able to directly commission development on publicly-owned sites.
The following infographic show responses from a LGiU Local Authority and FMB House Builders Survey. SME builders and local authorities were asked the question "Which of the following do you think act as barriers to enabling small scale development through the planning system?"
45% of local authorities and 64% of SME builders see insufficient resources in planning departments as a barrier to small sites.
Increasing resources in planning departments will reduce the challenge of identifying and allocating small sites for housing development. Staff, skills and capacity shortages can exaggerate uncertainty of delays in bringing sites forward.
Even with privately owned land, councils can weigh up potential benefits for landowners by using a small plot of land for additional housing but may be put off by complexity or cost. If the council were to communicate exactly how this process can be as easy and profitable as possible for landowners we would likely see an increase in small plots becoming available.
Working with SME builders will often lead to closer, more lasting relationships. More bespoke approach to design and quality and investment in local jobs and skills.
- FMB Research report - Delivering more homes through small sites
- FMB Press release - SMEs central to May's housing building vision
- FMB Press release - Planning fees rise could deliver more homes