Housebuilders call for government action to save SME development sector

Pocket Living and leaders of the housebuilding industry have launched a new campaign to calling on the Government to take immediate action to save the sector from potential collapse.

The campaign comes as a response to the Getting Britain Building Again challenge laid down by the new government and reflects the dire situation currently facing many SME housebuilders.

Ten policy recommendations have been published for how the Government seeks to rejuvenate the SME housebuilding sector, support the target of constructing 1.5 million homes and increase competition and choice for renters and purchasers of new homes.

These include streamlining the planning committee process, unlocking housing delivery on smaller sites, and enabling Homes England to better support SME developers. A number of the proposals could be incorporated into the government’s NPPF reform, announced this week by Angela Rayner.

The need for such intervention is critical, with the number of SME housebuilders plummeting to fewer than 2,500 today, down from over 12,000 in the late 1980s. This alarming decline along with other factors such as access to labour, construction costs, contractor insolvencies and the challenges of the planning system, has triggered an urgent warning from the industry that planning reform alone will not deliver the homes Britain needs without the builders to build them.

This campaign follows a series of announcements from the chancellor, Rachel Reeves, and has been contributed to by major players such as Berkeley Group, CIOB and a range of SMEs, suggesting a range of cost-effective and easily actionable policies.

Currently, SMEs are responsible for only 10% of the UK’s housing output, a significant drop from the 1960s and 70s when they contributed nearly 50% of new homes. This percentage is also considerably lower than that of many European countries.

As a reflection of how important the SME sector is to the wider industry, almost 50 organisations responsible for most of the UK’s open market and affordable housing delivery have come out in support of the campaign, including Barratt Developments, Berkeley Group, Clarion Housing Group, Southern Housing, British Land, Related, Peabody and a range of SMEs and Trade Bodies.

David Thomas, chief executive of Barratt Developments, said: “We welcome this report and its recommendations which are a positive and creative addition to the debate on housing policy. SMEs are vital to housing delivery, and we’d encourage the Government to look at ways they can be supported alongside other providers in the sector.”

Paul Rickard, managing director of Pocket Living, said: “As a sector, we are staring down the barrel of extinction, and it’s time for the government to take action before it’s too late. “Without a flourishing SME housebuilding sector, there is no way the government will deliver on its promise of 1.5 million homes by the end of this term.”

Marc Vlessing, founder and chair of Pocket Living, added: “Ever since I co-founded and led Pocket 20 years ago Labour has had a strong history of supporting small businesses in the UK. Their manifesto today promises to make small businesses ‘the beating heart of our economy’, so it’s time to use their substantial majority, heed the sector’s calls and implement these ten policy proposals, which are designed to be cost-neutral for the Treasury and should be low-hanging fruit for the Chancellor.”