FSB calls for Budget support for struggling small housebuilders

The Federation of Small Businesses has called on Chancellor Phillip Hammond to help rescue the nation’s small housebuilders in the upcoming Budget.

It comes as research highlights that the vast majority of smaller developers are struggling to expand, while new entrants are finding themselves locked out of the market entirely.

The data shows that just one in eight completed new homes are built by small house-builders, highlighting the scale of their difficulties.

Access to land and finance are two of the biggest stumbling blocks, according to the Federation of Master Builders.

The FSB believes that a two-pronged approach is required and has called on the Government to ensure that managing the two factors is a more straight-forward process.

By improving access to finance and thus allowing small construction firms to purchase materials and get planning consent, smaller sites can then be developed.

At the same time, it is also claimed that local authorities should use the planning system more effectively to ensure there is a constant list of sites with permissions to start development straight away.

An extension to the £3 billion Home Building Fund is one way in which smaller housebuilders could be supported, the FSB has suggested.

Making sites of ten units or less exempt from relevant affordable housing contributions could also encourage development, although local authorities must not raise the Community Infrastructure Levy as it would negate the move.

Small housebuilders that are struggling to access finance run the risk of insolvency should projects go wrong, as their funds are already tied up in existing materials and projects.

FSB Chairman Mike Cherry has already spoken of the “huge potential” that small housebuilders have to help meet the UK’s housing problem, but warned they need to be “given the keys to do so”.

He has described aspects of the current system as “inflexible”, which he claims has left many smaller housebuilders being “overburdened with unaffordable costs”.

Any construction firms with concerns over their finances should undertake an independent business review to take an unbiased look at their assets, finances and forecasts, and to see if their operations can be streamlined in any way.

By Phil Smith


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