The home building industry, like other sectors, has been greatly impacted by the ongoing coronavirus pandemic.
Following the Prime Minister’s address to the nation on 23 March, many home builders took the decision to down tools while they took time to establish new ways of working safely and productively in accordance with social distancing guidelines.
Protecting the health and welfare of the home building workforce, supply chains, customers and local communities is the industry’s top priority which is why we have been working with developers and the Ministry of Housing, Communities and Local Government (MHCLG) to produce a Charter for Safe Working Practice. The Charter launched on the 13 May and contains a number of protocols enabling developers to deliver new homes while also protecting the health and safety of those on site. Further information can be found below.
We welcomed the Government’s decision to restart the housing market and the industry looks forward to playing a critical role in the UK’s economic recovery over the coming weeks and months.
This briefing is intended to provide you with examples of recent industry activities, the latest statistics from the home building industry, key industry challenges and information regarding current HBF policy work and campaigns.
We hope you find it useful but if you have any questions or would like to discuss the opportunities and challenges facing the homebuilding sector in more detail, please contact:
David O’Leary, Policy Director: email@example.com, 0207 960 1612
Emma Ramell, Policy and Public Affairs Manager: firstname.lastname@example.org, 0207 960 1608
Jamie Allan, Policy and Public Affairs Assistant: email@example.com, 0207 960 1618
Further information can also be found on our website www.hbf.co.uk.
The Home Builders Federation (HBF) is the representative body of the home building industry in England and Wales. Our members are responsible for providing around 80% of all new private homes built in England and Wales and most of our members are small or medium-sized enterprises.
Following a survey of its members, HBF remains concerned that smaller developers are struggling to access the Government’s Coronavirus Business Interruption Loan Scheme (CBILS).
While HBF represents home builders of all sizes, the majority of our membership consists of SME developers. Of these, around half would be eligible for a CBILS loan but at the time of writing only a handful had seen their applications progress. A number of barriers are preventing home builders from accessing CBILS, including:
- Only a quarter of the British Business Bank (BBB) accredited lenders have experience of lending to the real estate sector
- Small builders are unlikely to have a Revolving Credit Facility, meaning it is difficult for them to satisfy the security requirements needed for CBILS
- Some lenders that are equipped and experienced in the home building finance market have refused CBILS applications on a sectoral basis. Individual lenders appear to be taking different views on this question, even within the same institution. A number of reasons have been cited, including:
- An outright exclusion of real estate
- Making decisions based on a determination as to whether the lender would have lent to the developer prior to the coronavirus outbreak. Because this would typically have been on a project-by-project basis, lenders are determining that at a group level, they are unwilling to lend to builders
- An interpretation of BBB guidance for establishing viability being that ongoing cashflow is required by way of contracted income. Developers with inconsistent revenues dependent on making sales are therefore excluded
- Ineligibility for businesses that use Special Purpose Vehicles (SPVs) to deliver housing schemes – this is the primary route through which small home builders deliver new housing schemes
Home building has an important role to play in the economic recovery but in order for this to be realised, it is vital that smaller builders are able to access financial support to enable them to survive this difficult period.
We would welcome the opportunity to discuss our concerns with you in more detail. Please contact HBF’s Policy Director firstname.lastname@example.org for further information.
The Help to Buy Equity Loan Scheme is a key driver in reversing recent declines in home ownership levels amongst young people. Last year a total of 42,960 first-time buyers used interest free loans to purchase their first home.
Over the period since the launch of the Help to Buy: Equity Loan scheme (1 April 2013 to 30 December 2019), 263,297 properties were bought with an equity loan.
- 81% of purchases using Help to Buy have been bought by First Time Buyers (FTBs)
- To date, 83% of new homes bought with Help to Buy were for £350,000 or less
- The proportion of houses sold under the scheme on a leasehold basis has declined rapidly since 2017 – just 1.3% of houses sold under Help to Buy in Q4 2019 were on a leasehold basis.
If you would like information on how the current scheme is helping FTBs in your constituency, please do not hesitate to get in touch.