Easier access to finance for small and medium enterprise (SME) house builders must be made a government priority, to capitalise on recent signs of improvement observed in the Federation of Master Builders' (FMB) latest survey of small housebuilders.
Brian Berry, chief executive of the FMB, said: "We are at last starting to see some real improvements in our members' ability to deliver new housing. The FMB's 2015 House Builders' Survey shows increased levels of participation in house building by small builders, boosted by a buoyant housing market and government moves to improve access to finance.
“However, it is still disappointing that nearly two thirds of builders cite difficulty in accessing finance as inhibiting their ability to deliver new housing. Too many small developers are being held back by banks' reluctance to lend for small-scale development, which is stopping new building.
“Government initiatives such as the Builders Finance Fund and Housing Growth Partnership have helped ease the situation but it needs to continue to seek ways of encouraging the flow of finance into the SME sector. Some form of loan guarantees, or further well-judged interventions along the lines of the Housing Growth Partnership, would be helpful."
Mr Berry said: "There is still a long way to go to help reverse the huge decline in the number of SME house builders over the course of the economic downturn. Our survey shows that availability of suitable and viable small sites is now the most commonly cited barrier to delivery. This seems to be most keenly felt by those looking to develop small sites of fewer than five units.
“Hopefully, new government initiatives designed to speed up the approval of small sites will help address the problem. The Government also needs to consider how to respond to the recent High Court decision that overturned exemptions from affordable housing contributions for small sites.
“A third of survey respondents stated that they know of sites for which a ten unit threshold for affordable housing could make the difference between viability and non-viability. I would urge the Government to defend the principle of this policy," Mr Berry added.
Housing and Planning Minister Brandon Lewis MP said: "This One Nation Government has got Britain building again. Confidence is up and we're starting to see a real revival across the industry, but we know there is more to do. That's why we're helping to boost the supply of houses, with £1bn in brownfield funding to generate more viable land and building 200,000 Starter Homes.
“Our new Housing Growth Partnership will also help smaller builders invest in new projects, allowing them to recruit and train skilled workers and become more competitive in their local area. I'd encourage them to apply for a share of this £100m fund," he added.