SME house-builders slam government’s “anti-development” policies

Members of the Home Builders Federation (HBF) have delivered a letter, signed by 200 SME building firms, to 10 Downing Street highlighting what they see as “an existential threat” to their survival posed by the government’s “anti-development” policies.

The letter cites a survey that found that 78% of small house-builders are considering scaling back their residential construction activities and 87% are considering a change in business direction, leading to a fall in investment in the sector.

SME builders play an important role in the house building industry and, amidst a growing housing crisis, are key to its ability to deliver the homes the country needs, the letter says. Often regionally based, SME firms tend to focus on smaller sites and play an active role in local communities and their economies, investing in infrastructure and supporting employment through recruitment and training schemes.

The letter highlights a number of areas where recent actions or failing policies are threatening the viability of small builders. These include;

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  • The collapsing planning processwhich it describes as “cumbersome and inefficient”. Under-resourced local authority planning departments can take years to process applications to the point where work can start. This ties up capital, preventing SMEs operating elsewhere.
  • Michael Gove’s capitulation on the planning system to an “anti-development faction of Conservative MPs” including the removal of mandatory housing targets and a softening of the Five-Year Land Supply Requirement.
  • Interventions by Natural England over nutrient pollution which are delaying delivery of an estimated 180,000 homes.
  • The growing number of new taxes, regulations and policies which are adding at least £20,000 to the cost of building a new home, impacting the financial viability of developments.
  • Supply chain issues and the “challenging economic environment”are further driving up costs.

The government’s “anti-development and antibusiness messaging” and the ever-changing policy environment makes recruitment increasingly difficult, the letter says.

Speaking today in Westminster, Stewart Baseley, executive chairman of the Home Builders Federation said: “SMEs are the lifeblood of all industries, but in house building we are seeing them being driven out by an increasingly anti-development, antibusiness policy environment. The planning process is grinding to a halt and regulatory costs are rocketing, whilst the nutrient issue has put the brakes on sites across a quarter of the country.

“The impact of this policy approach is devastating for SMEs, and businesses unable to operate or generate an income are laying off staff, or increasingly closing their doors. We are urging Government to act now so that the businesses that remain have a chance of survival.”      

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