The Federation of Master Builders

New homes stand empty as local house builders struggle, warns FMB

Published date: 28 April 2020

Local house building firms risk going bust if they continue to be left stranded from Government support packages, according to the Federation of Master Builders.

According to new FMB research among small to medium-sized (SME) house builders about their workloads and ability to access Government support:

  • 31% have new homes standing empty as a result of customers pulling out or delaying purchases as a result of COVID-19
  • This equates to, on average, 7 homes per firm standing empty with a cost of £629 per month in empty homes council tax
  • 0 respondents have acquired a loan from their bank via the Coronavirus Business Interruption Loan Scheme (CBILS)
  • 3% have received a cash grant via Small Business Rates Relief from their local authority.

When asked what the most important intervention from the Government would be to support SME house builders:

  • 43% said ensure house builders can access working capital finance
  • 23% said remove council tax on empty properties.

Brian Berry, Chief Executive of the FMB said: “Small house builders need working capital finance to get through this difficult period. Unfortunately, they are not able to access much of the Government’s support packages.

“The Housing Secretary recently stated that he is keen to work with small to medium-sized (SME) house builders to address the housing crisis, but their numbers will decline further if more is not done. As a priority, working capital finance should be made available to house builders via the Home Building Fund, and Council tax on empty properties on small sites should be removed.”

Alli Gay is Director of CHI Homes, a micro developed based in Bristol and President of FMB South West.

Alli Gay, Director, CHI Homes, said: “House builders that can safely keep sites open are struggling to get the materials and workforce they need on site. This means it’s taking much longer to build each house. As any business owner knows, more delays mean more costs. In my case, that equates to £65,000 of extra costs that I didn’t budget for this year.

“The result is that for my next development, I will have to buy a smaller patch of land and will build fewer homes. Multiply that across the industry and, as a nation, we collectively take two steps back in our efforts to tackle the housing crisis.”

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