Brian Berry is Chief Executive of the Federation of Master Builders (FMB), the largest trade association in the UK construction industry representing the interests of small and medium-sized building companies. Before joining the FMB, Brian worked at the Royal Institution of Chartered Surveyors (RICS), where he was Head of UK Public Policy. Brian regularly provides commentary on construction issues for TV, Radio, national and trade press.
Housing is the big issue consuming the Government, well beyond just the Housing Department, all departments are working out how they can help deliver the Government’s target of 1.5 million new homes. It will take a gargantuan effort, alongside rapid reform and an ambitious skills strategy, to succeed.
Against this backdrop the FMB held its annual Parliamentary Reception at the House of Lords, with Housing Minister Matthew Pennycook MP as the headline speaker. The event marked the launch of the FMB’s new research report; ‘Supporting SME Housebuilders: Challenges and Opportunities’, in collaboration with the London School of Economics (LSE).
The Minister spoke about the ambitious targets which the new Government has set out to get Britain building more homes, but he was clear that more needs to be done to help support SMEs, if these goals are to be reached. The findings from the FMB’s research highlight the importance of diversifying the housing market, which is too over reliant on a small number of volume developers.
The report argues that small house builders can bring immense value to the housing market in terms of greater consumer choice and quality. However, the housing market cannot be relied upon to naturally readjust to deliver the type of SME housing output seen in the 1980s, when they accounted for 40% of all new homes. SMEs now build only 10% of new homes, but it’s widely felt even this low percentage may be generous.
Government intervention is crucial, with proposals including the introduction of government backed low-interest loans and a more hands-on approach from planning officers. One of the biggest barriers identified in the research is the failure of local authorities to allocate sufficient small sites for development in their Local Plans – something that was notably overlooked in the Government’s changes to the planning system announced in December.
SME house builders are equipped with unique skills and local expertise, with many wanting to expand their businesses. But to leverage their impact on the market they must overcome barriers, many of which impact them disproportionately compared to larger developers. Small builders can deliver high quality products, with a key role to play in the market by providing homes to match local need, boost the local economy, and build upon unused land. We need to break down the barriers that hold back SMEs and give them the tools to deliver the homes our country needs.