Last updated: 27 Oct 2026
Measuring SME home builder sentiment
Track changes in SME home builder confidence and assess the barriers to housing delivery and their influence on investment decisions over time.
HBF’s SME Sentiment Survey has been designed to track changes in SME home builder confidence over time and provide robust evidence to Government and policy makers on the need to address the key barriers constraining housing delivery.
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Sponsored by Quantum Development Finance (QDF), a specialist property lender providing flexible, short to medium-term finance solutions to SME housebuilders and property investors across England, Scotland and Wales. QDF offers loan sizes from £1m to £35m across residential development loans, bridging finance, operational real estate, and residential investment loans.
Latest results
SME confidence lowest since survey began as housing delivery faces mounting pressures
The fourth quarterly SME Developer Sentiment Survey reveals a further deterioration in confidence among small and medium-sized home builders, with development viability, planning delays and weak market conditions continuing to constrain investment and housing delivery.
Almost six in ten respondents (58%) expect to reduce land purchasing over the next three months, compared with 20% who expect to increase it. The net balance remains negative at minus 38%, following minus 39% in Q3 and a positive balance of 5% in Q1.
Confidence in new housing starts has weakened further, with 61% expecting to decrease construction activity, compared with just 18% who expect to increase it. The net balance has fallen to minus 43%, its lowest level across the four quarterly surveys. These findings raise concerns about the future pipeline of housing supply.
Market conditions are suppressing investment and new site starts
Current market conditions continue to significantly affect developers’ willingness to bring new sites forward, with 96% of respondents reporting that conditions are making them more cautious about starting developments.
Almost six in ten respondents (59%) say conditions are causing considerable caution or delaying the commencement of new sites. Negative sentiment is particularly pronounced in the South West, where 88.9% report a negative outlook, followed by the South East at 83.7%.
The findings reflect the difficult balance developers face between construction costs, uncertain sales demand, planning requirements and buyers’ ability to afford new homes. Uncertainty over achievable sales values and development costs is making investment decisions increasingly difficult, particularly for smaller businesses with limited financial resources.
Low buyer confidence and mortgage rates remain major barriers
Housing market conditions are the most frequently cited demand side constraint, identified by 69% of respondents. Low buyer confidence follows at 64%, while mortgage rates have become an increasingly prominent concern, rising from 26% in Q3 to 45% in Q4. Housing affordability was cited by 31%, up from 25%.
The findings demonstrate that challenges extend beyond securing land and planning permission. Developers must also be confident that completed homes can be sold at prices buyers can afford while maintaining an acceptable development margin.
Weak buyer confidence and higher mortgage costs increase the risks associated with committing capital to new developments, contributing to reduced land purchases and fewer anticipated housing starts.
Development viability and planning delays remain the biggest supply-side challenges
Development viability remains the most significant supply side constraint, cited by 84% of respondents, up from 75% in Q3. Planning delays remain the second most frequently cited barrier, identified by 72%, while regulatory and taxation burdens were cited by 45%.
The findings underline the cumulative pressure placed on smaller developers by construction costs, planning delays, taxation and regulatory requirements. These challenges can make marginal schemes unviable, discourage investment and reduce the number of sites progressing to construction.
Addressing these barriers will be essential to restoring confidence and enabling SME builders to contribute more effectively to housing delivery.
SME builders call for Government action to restore confidence
Confidence in the current policy agenda remains exceptionally low, with 95% of respondents reporting that they are not very confident or not at all confident that meaningful improvements will be delivered.
Despite this pessimism, the survey identifies an opportunity to stimulate housing delivery through targeted demand side measures. Three quarters of respondents (75%) say that measures such as the proposed Your First Home equity loan scheme or Stamp Duty Land Tax reform could encourage additional site starts. Almost a third (32%) say these measures would provide significant confidence to proceed, while a further 43% would consider planning additional starts.
Another 18% believe demand side measures could accelerate sites already planned. Overall, 93% believe these interventions could encourage additional starts or bring forward existing developments.
The findings suggest that targeted support for buyers could help unlock development, but its effectiveness will depend on the design and accessibility of the Your First Home scheme. The Government must address both supply and demand-side barriers to restore SME confidence, encourage investment and support the delivery of new homes.
View previous results
SME Developer Sentiment Survey October 2026
SME Developer Sentiment Survey August 2026
SME Developer Sentiment Survey June 2026
SME Developer Sentiment Survey March 2026
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