FMB believes the Government could miss its target to build one million new homes by 2020 unless it unlocks the potential of SME house builders.
Shelter's research shows that the biggest barriers preventing SME building firms from expanding are obtaining planning permission and development finance, and the availability and cost of land.
Shelter is now calling on the Treasury and DCLG to introduce a ‘Help to Build’ package for SME firms. The charity says this can be done by forcing public bodies to release smaller plots of public land, incentivising lenders to provide development finance, and directly commissioning multiple smaller firms on large projects.
Sarah McMonagle, Director of External Affairs at the FMB, said: “Even prior to the referendum vote, the Government faced an uphill struggle to meet its own target of building one million homes by the end of this Parliament. The number of annual completions have risen steadily over the past couple of years, but not sufficiently to suggest that there’s any margin for error when it comes to the Government’s attempt to increase output. It’s still too early to tell what effect the decision to Brexit will have but it stands to reason that any wobbles in the house building industry will inevitably have a profound effect on our ability to hit that target. It’s therefore essential that the Government is aware of the risks and does everything in its power to mitigate those risks.
“While we’ve been encouraged by the suggestion from the new PM that she will continue to prioritise housing, we need more than just words – we need bold new policy interventions. As Shelter’s report identifies, there’s a compelling case for turbo-charging the SME house building sector, which policy makers have started to recognise is key to reaching the levels of house building that we need.
"Some progress is being made in terms of reforming the planning process and improving access to finance for smaller firms but there’s much more that the Government can and should be doing. Over and above Shelter’s recommendations to the Government, we’re calling on Ministers to lift the borrowing on local authorities and allow councils to be significant house builders once more. This will help calm any confidence wobbles among private developers and put the house building industry back on track, helping us reach that target of one million homes.”
