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Member Briefing: Planning, red tape and access to finance holding back SMEs: HBF report on barriers for small builders

Date: 16/01/17

Planning, red tape and access to finance holding back SMEs: HBF report on barriers for small builders

The Home Builders Federation has published a new report examining the barriers to entry and growth for new and existing house builders. The report, Reversing the Decline of Small Housebuilders: Reinvigorating Entrepreneurialism and Building More Homes, also includes proposals to open up routes to finance and roll back decades of red tape and planning risk and complexity to allow small and medium-sized builders to play a greater role in building the homes the country needs. 

The report’s foreword, written by Redrow Chairman, Steve Morgan, explains how the ‘bureaucratic nightmare’ of obtaining planning permission and securing finance for makes it ‘almost inconceivable’ to grow a start-up into a national house builder. New analysis charts the decline of SMEs from the late 1980s when four in 10 new homes were built by smaller firms and outlines how returning even to the number of active builders in 2007 could help to increase housing supply by around 25,000 homes per year. 

Recommendations have been informed through multiple meetings and discussions with HBF members, including a large number of in-depth interviews with members of HBF’s Metropole and Small Developers Groups which are quoted throughout the report. Recommendations include:  

  • The creation of a ‘Help to Build’ scheme to support SMEs accessing development finance on fairer terms
  • Allowing small house builder to benefit from tax incentives that are available to sectors’ SMEs
  • Phased planning application fees
  • A presumption in favour of development on appropriate brownfield sites
  • Increasing the size of the ‘buffer’ in five year land supplies
  • Regular monitoring of housing supply with additional sites allocated to deal with under-delivery when it occurs
  • Doing more to ensure that local planning authorities allocate a broad range of sites for housing
  • Reforms to the way that new roads are planned for and adopted
  • Recasting the definition of a small site in planning policy
  • Reclassification of garden land so that sustainable infill sites can come forward without prejudice  

Read more here. The full report is available here

David O’Leary

Policy Director