New report reveals the challenges faced by small house builders

New research from the National House Building Council Foundation says that some small house builders are being hindered by delays and rising costs in the planning system and this is causing some to leave the industry.

The report - Small house builders and developers: current challenges to growth – shows that a third of small builders wait more than a year for local authority planning approval, whilst nearly 80% have endured a significant rise in planning-related fees over the past two years.

Information has come from almost 500 companies who typically build less than ten homes a year, the NHBC Foundation has revealed the conditions that small house builders face. Another sizeable barrier is the lack of viable land; 37% of respondents cite a shortage of available land at a suitable price as their most serious obstacle to growth.

Finance availability is a significant concern for 20% of respondents, although the NHBC Foundation said that this issue “has improved in the last two years, with more small builders obtaining finance from banks or private sources.”

Encouragingly, the report also finds that 58% of small builders are optimistic about the future of the industry.

In the report, the NHBC Foundation makes a number of recommendations for the government and the industry to address the hurdles small house builders face and help bolster this part of the sector. These include a call for the government to speed up decision making in the planning system, reduce inconsistencies and provide a clear tariff system; and increase the availability of smaller sites suitable for schemes of up to ten homes.

Neil Smith, NHBC’s head of research and innovation, said: “The increasing complexity, time taken to achieve a decision, and the unpredictability and inconsistency within the planning process are slowing the delivery of new homes and, in some cases, causing companies to leave this market.”