6 COMMENT THE INDUSTRY ADVOCATE
Brian Berry, chief executive of the Federation of Master Builders
FMB SURVEY REVEALS BARRIERS TO BUILDING
In his regular column for Housebuilder & Developer, Brian Berry of the Federation of Master Builders (FMB), walks readers through the results of its annual House Builders’ Survey, which has once again highlighted land, planning and finance as the main barriers to SME housebuilding.
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A LACK OF AVAILABLE AND VIABLE LAND IS STILL THE MOST COMMONLY CITED BARRIER TO INCREASING OUTPUT FOR SME BUILDERS
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t’s that time of year again, when the Federation of Master Builders (FMB) publishes its annual House Builders’ Survey. This is the only annual survey in England that tracks barriers to small and medium-sized (SME) housebuilders – and it is now in its eighth consecutive year.
This year’s top three barriers – land, planning and finance – remain the same as last year, but encouragingly all of these have come down over the past 12 months.
LAND
A lack of available and viable land is still the most commonly cited barrier to increasing output for SME housebuilders. This is now the fifth year in a row where this was cited as the top barrier, with 43 per cent of respondents reporting this, down from 59 per cent last year. Members reported that it is however becom- ing easier to find plots of land locally through technology such as Zoopla and Rightmove. In terms of land supply – despite recent changes to the National Planning Policy Framework (NPPF) regarding small sites – 54 per cent of respondents reported that small site opportunities are, if anything, decreasing. Only 7 per cent reported that they are increasing, with most stating that the situation has not changed.
One disappointing figure that stood out in
the report here was that only 26 per cent of respondents reported that local authorities are taking small sites more seriously. This is down from 41 per cent last year.
PLANNING
The second major barrier cited again this year was the planning system, reported by 42 per cent of respondents. When asked what the main cause of delays in the planning system was, the majority of respondents cited ‘inade-
quate resourcing of local planning depart- ments’ for the fourth year in the row. This is despite planning fees being permitted to rise by 20 per cent in 2018. In fact, only 3 per cent of SME housebuilders said that the speed and service of planning departments had improved since the rise – 38 per cent reported they had worsened.
Delays in the planning system add extra risk and cost to a development, and can be a major headache for SME housebuilders. We look forward to hearing the government proposals for reforming this area, in the ‘Accelerated Planning Green Paper.’
FINANCE Finally, the third major barrier to SME house- builders reported this year is the lack of access to finance.
This is one area we have seen a major improvement in over the decade. In 2012, 72 per cent of FMB members cited access to finance as a major constraint on building new homes – in 2019 that was 39 per cent. We have also seen a fall in the number of sites that have stalled due to financial reasons, falling from 47 per cent to 39 per cent. While this is welcome, we have seen a sudden rise in the number of loan refusals, which had been falling steadily over the last few years. This shot up from a score of 4.67 (out of 10) to 5.15 in the space of a year. This could be an indication that lenders are taking a more cautious approach in the lead up to Brexit.
So overall, there are some positive signs that SME housebuilders are finding it easier to build and increase output, and hopefully this leads to growth in the sector. However, the barriers, while reduced, still remain marked and there is still much more to be done to bring these down.
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