The Chartered Institute of Building is backing an All-Party Parliamentary Group (APPG) report into the issues faced by SME housebuilders when accessing finance.
Earlier in the year, CIOB responded to a call for evidence from the APPG for SME housebuilders. The group launched an inquiry to investigate the financial challenges in housebuilding within the SME sector.
Whereas SME housebuilders built 39% of homes in England in 1988, this output dropped to 10% by 2020, according to figures from the Home Builders Federation quoted in the report.
The report’s recommendations
The CIOB said it is “openly supportive” of a number of the report’s recommendations, including:
- Local authorities should avoid making validation requirements more onerous. Moves that make it even more costly for SME housebuilders to submit planning applications should be avoided.
- Homes England should adopt a more proactive and hands-on approach towards financing SME housebuilder-led developments through a combination of buying equity shares in developments and offering indirect finance by lending to development finance firms.
- The Department for Levelling Up, Housing and Communities should urgently consult with local authorities and the modern methods of construction (MMC) sector to develop revisions to the Building Regulations (2010) which reflect the reality of MMC construction and ensure that building control departments are able to promptly sign-off MMC developments.
- The inadvertent double government charge on modular manufacturers should be removed by exempting them from the scope of the Construction Industry Training Board Levy, reducing costs of MMC offsite manufacturing and potentially improving viability and access to finance.
David Parry, parliamentary and public affairs officer at CIOB, said: “We’re pleased to see the launch of the APPG’s report into access to finance for SME housebuilders. The report draws directly from the evidence we submitted following feedback from our members and provides a comprehensive series of recommendations to improve the current ability of SMEs to compete in the constrained housebuilding market.
“In particular, we welcome the APPG’s suggestion that Homes England could provide more support to SME housebuilders as a route into the market through increased financing and a more proactive, hands-on approach to development finance. In the absence of local plan quotas for SME-led developments the government desperately needs to provide financial incentives to alleviate the significant cost pressures of competing with volume housebuilders.
“The report demonstrates how by engaging with us and providing an on-the-ground perspective to our policy work, CIOB members can influence policy makers and ensure the important views of the industry are heard.”
Also this week, CIOB attended the launch of the Construction Leadership Council’s guide aimed at helping new developers get into the construction industry. The report, which was funded by the Federation of Master Builders, offers advice similar to the CIOB’s client guide, designed to help construction clients achieve better project outcomes and create more value.
The APPG for SME Housebuilders is chaired by Conservative MP Andrew Lewer. The group has previously conducted inquiries into skills and apprentices and the role of Homes England and planning reform.
The APPG SME housebuilders report was funded by property finance firm Cowgills and Aldermore Bank.
