According to Robert Grigg, Managing Director of Property Finance at Hampshire Trust Bank, the bureaucratic burden SME housebuilders shoulder must be lightened.
The government’s ambitious housebuilding targets cannot be achieved by volume housebuilders alone so how do we support SME housebuilders, a key sector in boosting housing stock, and help them build for the future? While there is no silver bullet solution, we believe that cutting the red tape that is holding SME housebuilders back is the best place to start.
According to a government review earlier this year, while housebuilders of all sizes face significant challenges, there is a “disproportionate burden on SMEs”, with access to finance, procurement regulations, land availability and compliance with regulations and technical standards being key concerns.
Indeed, as highlighted by the Home Builders Federation (HBF), while all housebuilders face the same frustrations, the difference is that larger firms can more easily absorb the risks whereas the ”inevitable delays and expensive bureaucracy on a single site can be the difference between a small company staying in business or not”.
So, what is being done to cut the red tape and level the playing field for SME housebuilders?
As part of the recent Autumn budget, the government announced it will consult on measures that will ensure “local authorities bring forward 20% of their housing supply as small sites”, in a bid to speed up the building of new homes and support the aim of “increasing competition in the house building market”.
We believe the government is right to put the SME housebuilder at the heart of their housing strategy. However, with the Autumn Budget building on measures included in the Housing White Paper, which was released earlier this year, the question is whether these plans will result in action.
The time for consultations and proposals has passed, decisive steps must but be taken now to eliminate red tape. While due diligence in planning is required, we believe that the amount of information required when submitting a planning application and the conditions imposed should be proportionate to the size of the site.
In addition to the planning process, the housebuilders we work with often face frustrations and delays from infrastructure and utilities providers. We agree with the HBF suggestion that service level agreements should be considered, helping to speed up the process for SME housebuilders.
Ultimately, in order to eliminate red tape and in turn better support SME housebuilders and fix the broken housing market, the issue must be brought to the top of the political agenda. According to Lewis Johnston, Parliamentary Affairs Manager at the Royal Institution of Chartered Surveyors, we have had 14 Housing Ministers in the last 19 years. This is not helping. The industry needs clear guidance and a consistent approach, ensuring proposals result in policy.
Cutting the red tape with help SMEs become more competitive, increasing the supply of housing and helping people on to the property ladder, a goal which is currently out of reach for many. It’s a win win situation and the sooner steps are taken the better.
PHOTO CREDIT: Prk11