More than half of SME builders surveyed by the Federation of Master Builders (FMB), identify the planning system as their primary obstacle to delivering new homes
Inadequate resourcing and poor communication in planning departments are major contributors, hindering the planning system and leading to extra expenses.
The most significant cause of additional costs was due to planning delays. Out of the 127 members surveyed, only 12% had a ‘high degree of certainty’ in the planning process.
Commenting on the survey’s findings, FMB chief executive Brian Berry said: “For small builders, the survey is clear that the system is too complex and costly. Communication from local planning authorities is also poor. Without changing this, planning issues are likely to loom large as a barrier for some time.”
The second biggest barrier to the planning system is restricted mortgage availability
The second biggest barrier was restricted mortgage availability, with 51% indicating this was a problem.
Buyer demand was at its lowest since 2015, when the survey began recording this data, with an average score of two out of five, with five being very good and nought being very poor.
Interest rate charges continue to hold SME developers back
The survey showed that access to finance has received its lowest rating in six years.
Interest rate charges on new loans were quoted as the most significant issue, restricting the ability to build new homes.
53% cited self-build or custom contracts as the most popular source of funding for a new project.
94% said it had become more expensive to build over the last 12 months
53% said it had become 20% more expensive, with one in five saying it was 30% more expensive per site.
Half of the respondents said they would be upskilling their workforce, with 36% reporting they would hire one or more apprentices.
Over 70% of respondents said they were not confident about the new rules on biodiversity net gain, which go live next year.
More than half said there would be increased costs associated with future homes standards in 2025 when gas boilers can no longer be installed.
