Small house builders and developers: current challenges to growth (NF76)
The UK’s small house builders – those building up to 50 homes a year – play a vital role in meeting the increasing demand for new homes. However, this important sector of the house-building industry is in decline and facing a number of significant challenges.
This report provides an update to the NHBC Foundation’s 2014 report Improving the prospects for small house builders and developers (NF57), allowing comparisons to be drawn with the current state of the sector. It explores the reasons for the decline and examines the factors that are currently limiting business growth, pinpointing those areas of the planning process that require improvement and highlighting the need for improved access to smaller, viable sites.
Summary of content
This report includes:
Background and introduction
Methodology – sets out the stages of research: gathering qualitative feedback from focus groups followed by a survey of over 450 small house builders/developers. In this study house builder size was limited to those building up to 50 homes a year.
Characteristics of the small house builders taking part
The report describes the house builders according to their length of time in business, their customer type, their range of activity, number of homes built per year, how they differentiate themselves, their project pipeline and employment of apprenticeships.
Views on market conditions
This section presents the house builders’ degree of optimism/pessimism on the market over the next two years. Most were cautiously optimistic.
Factors affecting growth
Summarises the main factors bearing on small builders and introduces the next three chapters:
Discusses the impact of the planning process on small builders and provides more detailed feedback on three critical aspects:
- Length of time before a start is possible on site
- The extent of planning conditions
- Costs and tariffs associated with planning.
Land – availability and cost
71% of respondents rated land availability and cost in their top two business challenges, with builders in England being more seriously affected than those in Wales, Scotland or Northern Ireland.
Issues related to finance were of slightly less concern than when this survey was conducted in 2014, however certain aspects such as the availability and cost of finance remained a challenge for over 45% of the small builders in this study.
House builders’ views on the impact of government initiatives and their own future plans are also included.