HBF‘s State of Play: The impacts on SME’s
What are the top barriers for SME’s?
The survey reveals that the top barriers to SME home builders’ growth are rooted in the planning process, with the leading issues being delays in securing planning permissions and discharging conditions, as well as under-resourced Local Planning Authorities (LPAs). These challenges have remained consistent for five years, disproportionately affecting SMEs due to their funding and business models.
Other issues affecting housebuilders include:
- Ever-growing interest rates, consumer confidence and mortgage affordability
- Land availability and planning costs
- Section 106 requirements as RP’s are facing a wide range of pressures
- Nutrient neutrality rules
- Costs and timescales involved in the provision and adoption of utilities
- Sustainability of new homes and the Government Biodiversity Net Gain mandate
Prolonged delays often stall SME builders’ operations entirely…
Survey findings underscore the problem, with over half (51%) of respondents reporting planning permission delays exceeding a year, some waiting over two years, and at least one case extending to three years without resolution.
The decline of SMEs has been a long-term issue, with this report documenting the persistent and emerging challenges affecting these businesses for the past five years. The shift in government presents a crucial opportunity to adopt a fresh approach that SME home builders urgently require. While recent announcements on planning reforms are a positive step, further action is needed across various areas to support these businesses, boost housing supply, and address the ongoing housing crisis.
Phil Hooper, CEO at Close Brothers Property Finance, said: “Responses to previous versions of the State of Play report show SME housebuilders have consistently built homes that exceed environmental regulations. With greater support, including planning reforms and brownfield sites being freed up, they could go even further and play a significant role in the decarbonisation of our built environment.”
Recommendations from respondents:
LPA Resources – Invest greater resources in Local Planning Authorities
Support for FTB’s – Introduce a new form of Government support for FTBs to get on the property ladder
Nutrient neutrality – Introduce new legislation to release the 160,000 new homes currently being held by nutrient neutrality mitigation measures implemented by Natural England
Sustainability – Ensure the details of the Future Homes Standard and other changing Building Regulations are brought forward as soon as possible to allow businesses sufficient time to prepare
