8 industry news
SMEs could deliver 25,000 more homes p.a. S
ME housebuilders could play a much big- ger part in tackling the housing crisis if given greater support, according to the
Home Builders Federation (HBF). A new report published by the HBF
highlights the challenges faced by SME housebuilders looking to increase output and set out a range of proposals to address the finance, planning and red tape barriers preventing smaller firms from taking a larger role in addressing the housing crisis. Over the past 25 years, the number of SME
builders has reduced by 80 per cent, but just getting back to the number operating in 2007 could produce an additional 25,000 homes a year. Stewart Baseley, executive chairman of the
HBF, said that while housing has increased 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. He continued: “If 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 additional homes being built, and boost economies up and down the country.” According to the HBF, throughout 1960s and
70s small companies could set up, grow quickly and establish themselves as significant contributors to local economies. This meant that by 1988, more than 12,000 SMEs were building new homes. Today however, the number of SME builders has dwindled, with very few new entrants able to secure a foothold and even many established businesses unable to grow. The barriers facing SME builders today are
numerous and varied. The HBF report is based on in-depth interviews and discussions with dozens of HBF’s smaller members and highlights some of these issues, including access to finance and the increasingly complex planning and regulatory systems. Even as banks have increased lending to SMEs
generally, the report reveals that the situation has improved little since the recovery from the 2008 financial
crash.The risky and expensive process required to achieve planning permission has thwarted SMEs without the infrastructure and financial ability to navigate them. While housing supply has
increased HBF report recommendations:
– Tackle specific planning problems that disproportionately affect the business environment for SMEs, including the lack of smaller sites and the impact of pre-commencement conditions
– Create a new Help to Build scheme to help extend sustainable lending to smaller companies
– Lift barriers for builders to access tax incentives and other support enjoyed by SMEs in other sectors
– Provide technical and planning advice services for fledgling businesses
– Seize the “opportunity of Brexit” to reform EU regulation, reducing the risk and complexity associated with building new homes
significantly in the past three years, said the HBF, such that it is now approaching the critical 200,000 per level, the vast majority of this increase has come from the largest builders. “With Government keen to see numbers continuing to increase, enabling SMEs to increase output will be key.”
£11bn in November, and two per cent year-on- year, according to figures from the Council of Mortgage Lenders (CML). CML figures showed that first-time buyers
borrowed £4.7bn, up four per cent on October and nine per cent on November 2015. This equated to 30,100 loans, up five per cent month- on-month and 8 per cent year-on-year. Home movers reportedly borrowed £6.3bn, up
seven per cent on a month ago but down five per cent compared to a year ago. This represented 30,700 loans, up six per cent month-on-month but down six per cent on November 2015. Remortgage activity totalled £5.8bn, down five
per cent on October but up 14 per cent compared to a year ago. This equated to 34,700 loans, unchanged month-on-month but up 13 per cent compared to a year ago. Landlords borrowed £3.2bn, up 10 per cent
month-on-month but down nine per cent year-on- year. This was 21,000 loans in total, up 13 per cent compared to October but down 10 per cent com- pared to November 2015.
respond online at
www.hbdonline.co.uk
House purchase lending up five per cent H
omeowners borrowing on house pur- chases increased at the end of 2016, up five per cent month-on-month to
Paul Smee, director general of the CML,
commented on the figures: “November lending reflected stable market conditions. Overall, 2016 did not match recent years in terms of house purchase lending growth, but lending remained resilient through regulatory and political change, and aspirations for home-ownership remain strong in the UK. “Our forecasts for 2017 may be less bullish than a year ago, as economic uncertainty weighs on the
market, but we still predict 1.2 million transactions and a slight increase in gross lending to £248bn.” He added that Buy-to-let lending, driven by
remortgage activity, “saw its strongest monthly lending level since the stamp duty changes on second properties,” introduced last April. “Despite this,” concluded Smee, “we expect buy-
to-let lending levels in both 2016 and 2017 to prove lower than their 2015 recent peaks, as further tax changes take effect.”
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