Lack of land piles pressure on housebuilders

Small construction firms are being held back by a lack of available land for development, which is placing increased pressure on their finances.

The Federation of Master Builders (FMB) has also claimed that a lack of financial options and skilled workers is holding up advances in the sector.

This follows a summer slump with August figures suggesting that many developers were holding off on projects given wider market uncertainty.

Builders in East Anglia have already voiced their concerns, while a report for the region suggests a housing shortfall of around 28,000 properties could exist by 2026.

Some 54% of small house builders said they felt the number of viable sites for development has declined.

Changes to planning regulations have freed up consented sites for development, however the vast majority of these are large and are snapped up quickly by the major housebuilding firms.

This means the small developers rarely get a look in, while project delivery often slows, as SMEs tend to complete projects faster than their larger counterparts.

New regulations relating to the number of affordable homes needed and the required financial contributions can also make smaller sites unviable for smaller house builders.

The level of infrastructure that is needed to accompany sites can also be a stumbling block for developers, as larger strategic sites often require considerable work before development can even begin.

Uncertainty surrounding the economy has also seen many larger developers pause their plans, as they fear for their financial position should something go awry.

Construction firms should seek advice from corporate insolvency specialists in such a situation, as financial support and guidance may be available to help overcome the issues they are facing.

Undertaking an independent business review can take an unbiased look at a company’s position, including a study of its forecasts, assets and finances, in order to develop a long-term strategy.


By Phil Smith


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