SME Housebuilders APPG Meets at Parliament to Discuss Overcoming Barriers

The first official meeting of the SME Housebuilders APPG, chaired by Sarah Edwards MP and moderated by APPG Secretariat, Edwin de Silva, took place in the Archbishops' Room, Millbank House, Parliament, this month.

The APPG, which is sponsored by Close Brothers Property Finance, invited over 30 SME housebuilders and other related institutions from across the country – country – with attendees travelling from Dundee to Devon. Attendees shared their experiences and discussed the structural challenges that are holding SMEs back from delivering new homes.

Amongst the key issues discussed were market challenges and how a lack of support for first-time buyers has led to a slowdown in the sales market. It was cited that just one out of 10 first time buyers can afford to purchase a property without help from family. Housebuilders voiced their eagerness for demand stimulus, such as the reintroduction of a Help to Buy scheme that would be exclusive to SME-led developments. Others suggested that banks should be able to apply their own internal lending assessments to first-time buyer mortgage underwriting, rather than be constrained by the 4.5 x income cap.

Delays within the planning system were also cited as a major challenge, with one attendee noting that in his local authority, the backlog of outstanding planning applications had exceeded 200. These delays are impacting on margins, further squeezing SMEs and obstructing access to finance.

Biodiversity Net Gain was raised by a number of housebuilders who have seen their housing developments held up for many months at a cost of tens of thousands of pounds, due to the administrative burden of complying with the regime. As a result, some urban sites have been rendered unviable as a result of BNG requirements, with the actual BNG costs being very low or minimal.

The National Housing Bank was also discussed, with attendees optimistic but wanting reassurance that SMEs won’t be crowded out by capital flowing to volume housebuilders. An attendee suggested that until interest rates are lowered, the Government should consider offering grants to SMEs, pointing out that for every private house built in the UK 35% of its value is returned to the Treasury through tax.

Sarah Edwards MP for Tamworth and Chair of the SME Housebuilders APPG, commented:

“Listening to SME housebuilders across the country about the issues they are facing with housing delivery I was struck by the similarity of the challenges which they all had. Planning departments hollowed out, councils unwilling to build to avoid upsetting existing residents, and affordable housing targets which made sites entirely unviable. I am proud to be chairing the APPG for SME Housebuilders and am committed to working together with these fantastic businesses to build the homes people need and fix our broken housing market.”