Brian Berry explores how a different kind of diversity – housing diversification – is vital to meeting housing targets, and why the FMB has co-founded a new action group.
The Government cannot meet its ambition of building 300,000 new homes a year without reversing the decline in small to
medium-sized (SME) housebuilders.
In the 1980s, SMEs built 40 per cent of new homes, but now that figure sits at around 12 per cent. Supporting SMEs has never been more important, as we know that local builders employ and train local people and contribute to economic growth in every community. Indeed, the coronavirus has shone a light on this country’s need for more spacious, good quality and affordable homes.
SME housebuilders create jobs, typically build higher quality homes, and to high standards of design, beauty, and sustainability. Research from the Federation of Master Builders (FMB) shows that consumers are twice as likely to be ‘very satisfied’ with the quality of their new build home if it was built by an SME compared to a PLC developer. Now is the time to support the rise of the SME housebuilder.
To this end, I am pleased that the FMB has joined forces with the UK Cohousing Network, National Community Land Trust (CLT)
Network, and National Custom and Self-Build Association (NaCSBA) to establish the Housing Diversification action group.
We are calling on the Housing Secretary to support the growth of alternative methods of delivering houses, and to do more to reverse the decline in SMEs. By facilitating the delivery of a much wider range of routes to housing development, we can unlock many more homes that our communities desperately need.
Housing Diversification is calling on the Housing Secretary to take the first step and establish a high-level Housing Diversification Task Force which will consider policies in support of SMEs, and community and custom building. We come armed with plenty of ideas in this space, one of the important ones being for the Government to commit to a five-year renewal of the Community Housing Fund as part of the next Spending Review. To measure our progress, we also need a robust and statutory system of reporting on diversification as part of government housing statistics. Without publicly available data on, for example, the number of homes built on small sites, we cannot understand the success of government policy to support SMEs.
Planning for the Future
This campaign comes at an important moment of debate with regards to the future of our planning system. The Government is planning radical reforms to the system, but these have received mixed reviews.
I personally believe that the premise of the reforms, which aim to bring greater certainty for small housebuilders navigating the planning system, are positive. This is because the FMB’s annual House Builders’ Survey found that ‘the planning system’ was the biggest constraint on SMEs’ output in 2020, with 48 per cent of small builders saying so. Efforts to simplify and streamline the process are therefore welcome.
However, in efforts to speed up housebuilding, I caution the Government against facilitating the creation of ‘identikit’ homes. It
is important that SMEs can continue to build the homes that communities want and need. That means maintaining a certain degree of freedom in the design and style of home that builders can bring forward. Beauty is subjective and design codes should not be too prescriptive nor prohibitive.
Any reform to the planning system should ensure that SMEs are supported to thrive, and that we unlock new homes in each community across the country. Without focusing on this outcome, we cannot meet the Government’s target of building 300,000 new homes a year.