Brian Berry, CEO of the Federation of Master Builders (FMB), discusses what the Government needs to do to deliver new homes plus extra support for SMEs this year.
We closed out 2022 with a very shaky end to proceedings, with the aftershock from the short-lived Truss administration still rumbling on. However, the signs of normality have started to creep back in and engagement with the government on housing issues is ramping up as they look to deliver much needed new homes.
The Government needs to keep this momentum up, as small, local house builders are facing increased costs and complexity from every angle. I just hope that the political will is there to get housing back on track and to reform the beleaguered planning system.
WE NEED ACTION
We need to improve planning, this will come as no surprise to anyone, from large scale commercial developers right through to my members, small local house builders, it’s just not working. I’m glad to say that FMB members had a chance to sit face to face with the previous Housing Minister, Lucy Frazer, and put forward their concerns, so I hope that this turns into action.
Ultimately, the UK needs more homes and I’m with the Government when they say homes need to be quality, diverse, and built with the community in mind. This is bread and butter for SME housebuilders as they are part of their community and consistently build quality homes for their local areas, so let’s back them.
PLANNING NEEDS REFORM AND FUNDING
You can’t go to any forum in the building industry and be far from a conversation on planning. It is a problem that is not going to go away without political will power and bluntly, money. However, with a Budget coming in March, we find the purse strings of the Treasury very tight at a time when planning departments are underfunded, understaffed, and struggling to hire new staff – who are often poached by the private sector. However, needing more funding, can’t be an excuse for carte blanche spending, planning departments would need to show they are unblocking the planning system. I would propose that planning teams receive increased funding based on performance, which would incentivise better and faster planning decisions.
But I also feel SMEs need that little bit more support; they are by no means technically less capable than their larger counterparts, but the administrative burden placed on small teams is substantial. A dedicated SME planning team per local authority would not only help grease the wheels of planning, but also support new entrants into the market, in what is currently a very hostile environment to find yourself in for the first time.
We do need to look beyond resourcing. Planning teams need to communicate more effectively, bringing transparency and clarity to the process. Digitisation would help, which I’m glad to see is an element of the Levelling Up and Regeneration Bill, albeit seemingly aimed at the public not the builder. This would create a simpler, more transparent system for all involved, but it shouldn’t be used to give the loudest voices another platform to block new homes.
HOW ARE THINGS LOOKING FOR SME HOUSE BUILDERS?
House builders are being directly and indirectly affected by the economic circumstances we find ourselves in. Issues with costs linked to changes in regulations and materials are causing a headache for local house builders, but other less obvious problems have sprung up, notably the lack of availability of mortgages. This was one of the top issues affecting house builders in the FMB’s House Builders Survey 2022 with 38% saying it’s holding back house building and 48% indicating this will get worse over the next three years.
Skills is another issue builders are having to contend with, and again was one of the top issues holding back house building in our annual survey. In the March Budget, the Government should use it as an opportunity to demonstrate its intention to tackle the skills crisis. Construction is not alone in struggling to hire new staff. There needs to be a comprehensive UK skills strategy, which helps roadmap how industry can work with the Government to plug the skills gap.
It is not an easy time to be a small, local house builder. There is an ever-growing list of issues adding to the cost of building a home, everything from biodiversity net gain to energy efficiency measures. None of this is unwanted by the industry, it welcomes moves to green our environment, but it’s all adding up, not only monetarily, but administratively. SMEs need to be better supported to deliver these changes and I implore the Government to do so.