The FMB House Builders' Survey, which has now been running for over a decade, provides a comprehensive breakdown of the major barriers stopping small, local house builders from delivering homes.
It also explores a wide array of broader factors that influence the market for small, local house builders.
Main constraints on supply
- The planning system is rated as the top major barrier holding back the delivery of new homes at 76%.
- Lack of viable is the second largest barrier at 61%.
- The third most significant issue facing small house builders is the lack of available land.
- Costs of national regulations, such as biodiversity net gain, have risen to fourth biggest barrier.
- Material costs are the fifth most significant barrier, which has dropped from fourth last year.
Planning application process
- Respondents rated ‘Inadequate resourcing of planning departments’ as the most significant cause of delay in the planning application process, followed by ‘Inadequate communication by planning officers.’
- The most significant extra cost of the planning system is the complexity and costs of hiring consultants.
- 39% of respondents have medium certainty in the planning process, with 34% seeing a low degree, and 16% a very low degree.
- 42% of respondents are operating on sites not included in local plans.
- The majority of respondents are building on brownfield land at 39%, with 11% building on green belt.
Small sites and land availability
- 71% of respondents report that the number of small site opportunities is decreasing, up from 63% last year.
- 55% have reported that the process of obtaining planning for small sites seems to be getting worse.
- 50% of respondents do not believe that the NPPF requirements on local authorities to identify small sites is helping.
Workforce and skills
- 24% of respondents are planning to grow their on-site workforce over the next year.
- 13% are planning to decrease their on-site workforce.
- 50% will be keeping their workforce at roughly the same size.
- 34% of respondents said they are planning to upskill their current workforce.
- 26% indicated they had employed one or more apprentice.
Buyer demand
- Buyer demand has improved since its lowest rating last year, with an average score of 2.68 (rated out of 5, with 5 being very good and 0 being very poor).
Access to finance
- When asked to rate lending conditions to micro, small and medium-sized (MSMEs) for residential development from 0 to 5 (0 being very poor and 5 being very good), the average score was 1.76 – which continues a decline from 2023.
- Fees charged on new or existing loans was rated as the most significant finance related issue restricting the ability to build new homes.
- High street banks are the most popular source of funding for a project (36%).
- 93% of respondents have indicated it’s become more expensive to build over the last year.
- Of the 93% noted above that said it had become more expensive to build, 44% said it was around 10% more expensive, with just under a third noting it is 20% more expensive per site.
Future of housebuilding
- 66% of respondents are aware of the Future Homes Standard.
