Planning, materials and labour shortages threaten housing delivery over the next 12 months with small- and medium-sized enterprise (SME) housebuilders even more concerned about these issues than last year, research has found.
The SME Housebuilding Sector: State of Play report, conducted by the Home Builders Federation (HBF), Close Brothers Property Finance and Travis Perkins, found that the majority of SME builders cited planning as a major issue.
94 per cent see delays securing planning permission or discharging conditions as stifling housing supply, up from 83 per cent in 2020.
78 per cent of housebuilders also see the supply and cost of materials as major barrier to delivery, up 20 per cent from last year. And 59 per cent view the supply and cost of labour as a major barrier, a 19 per cent rise from 2020.
This was followed by 47 per cent citing land availability as a major issue, up from 32 per cent the previous year.
Meanwhile, just seven per cent felt the pandemic’s impact of site closures and social distancing was a major barrier this year, compared to 44 per cent in 2020.
Almost half (49 per cent) of housebuilders reported that their yearly profits in 2020 were down last year, 14 per cent said profits were up and 21 per cent said they were not affected.
SME housebuilders made suggestions as to how the government can help them.
The top three were: to reform the planning process, specifically removing the red tape and better equipping planning departments, to ensure more land is available for smaller businesses and to make development finance easier to access on terms that allow builders to recycle their equity quicker.
“The combined challenge of both labour and material shortages, rising costs and planning delays are a serious risk to the delivery of new homes across the UK,” said Frank Pennal, chief executive of Close Brothers Property Finance.
“Developing homes takes months and years and while some of these issues might only be short-term, they risk leaving a lasting legacy on the provision of new homes.
“It is important for the industry to work together to overcome these issues, encouraging young talent into the sector, reforming the planning system and securing sustainable supply chains.”
“Recent decades have seen a collapse in SME builders numbers and the survey shows the considerable challenges the sector continues to face,” said Stewart Baseley, executive chairman of the Home Builders Federation.
“Every single SME I speak to is suffering badly from delays to the planning process.
“SMEs are literally having to put their businesses on hold whilst local authorities delay the start of construction as their planning departments don’t have adequate capacity to process applications effectively.
“Allied to concerns on materials and staff, planning delays threaten the demise of even more SME builders.”
“With more people than ever in need of good quality housing, it’s not an option to put down tools,” added Kieran Griffin, managing director of Travis Perkins.
“This survey shows how important it is that we work really closely with our customers and suppliers, and across the industry, to ensure developments continue.”