Improving the prospects for small house builders and developers (NF57)
Overview
- Small house builders and developers have contributed significantly to UK housing output. However in recent years these smaller companies have declined in number and are not showing growth as the recovery gains momentum.
- This study examined the business challenges that small house builders and developers have been facing.
- Planning, finance and land availability issues in particular were highlighted by companies, with many commonly identified as serious barriers to business growth.
- Addressing these barriers is a priority if small builders and developers are to prosper and make a greater contribution to the housing market recovery.
- This report suggests measures that could help small companies address the challenges identified.
Summary of content
Background
Describes how small companies contribute to housing supply. Plots decline in numbers of small companies. Comparison of small house builders with medium and larger house builders. How output was affected by the 2008 recession. Shows the business challenges recognised by small companies.
Main challenges related to planning included:
- Time taken to get a planning decision
- Level of Section 106 requirements,
- Community Infrastructure Levy (CIL)
- Insufficiently experienced planning teams
- Communications with planning departments.
Main challenges related to finance included:
- Reluctance of banks to lend
- Loss of local relationships with banks
- Bank fees imposed
- Unacceptable lending terms and conditions.
Land availability concerns included:
- Lack of information on land availability, particularly of underused public land and brown field land
- Lack of small parcels of land, whether stand alone or part of larger sites being developed.
Concerns over skills availability included:
- Overall concern over availability of skilled workers
- Lack of good quality subcontractors
- Lack of good site managers