SMEs urge action through Number 10 letter

SME housebuilders have delivered a letter to the prime minister today (July 6), urging for action to save their businesses with a survey revealing that 78% of smaller builders are considering scaling back residential construction.

The letter to government, signed by almost 200 firms, stresses that the government’s increasingly anti-development policy stance is posing “existential threats” to the survival of their businesses.

Signatories of the letter warn that blocks on development, including a “collapsing planning process”, threaten to decimate a growing number of firms in the upcoming months and years. The firms point out that there are an estimated 85% fewer small housebuilders than a generation ago; the barriers small builders face today are greater than ever before, according to the letter.

A survey of more than 200 SMEs shows, according to the Home Builders Federation (HBF), that 87% are contemplating a change in business direction, while 78% are thinking of scaling back activities.

HBF stressed that SME housebuilders were critical to the housebuilding industry, playing a key role in the sector’s ability to deliver much needed housing amidst a worsening housing crisis. With their often regional focus, HBF said that SMEs commonly targeted smaller sites and were actively involved in local communities and economies, “investing in infrastructure and supporting employment through recruitment and training schemes”.

SMEs have presented their letter at the door of Number 10, compelling the government to urgently address key areas which are harming the viability of small housebuilders, either through recent actions or failing policies, HBF said.

These include the planning process as “the number one barrier” for SMEs. “Cumbersome and inefficient, the process has worsened because of recent unhelpful interventions by the government,” HBF said. It pointed out the 58 local authorities that have withdrawn or suspended their local plans due to “Michael Gove’s capitulation on the planning system to an anti-development faction of Conservative MPs”.

The letter also highlights Natural England’s interventions including on nutrient neutrality, stalling an estimated 180,000 homes from the Tees Valley to Cornwall. HBF said there were moratoriums on housebuilding in 74 local authority areas, despite Natural England’s admission that new housing contributes little to high levels of nutrients.

HBF stated: “Whilst larger builders can focus on sites outside the affected areas, SME builders with their entire portfolio of one or a few sites on hold as a result, are in effect unable to operate and unable to build.” This was leading to longstanding staff or family members being laid off, it added.

The letter also points out the strain on SMEs of the growing number of new taxes, regulations and policies - adding at least £20,000 to the cost of constructing a new home - as well as a challenging economic environment and the government’s negative messaging making recruitment “increasingly difficult”.

“SME developers remain committed to addressing the country’s housing crisis and to increasing home ownership, but we cannot do it without a change of direction and policy from the government,” the letter read.

Speaking today in Westminster, Stewart Baseley, HBF’s executive chairman, said: “SMEs are the lifeblood of all industries, but in housebuilding we are seeing them being driven out by an increasingly anti-development, antibusiness policy environment. The planning process is grinding to a halt and regulatory costs are rocketing, whilst the nutrient issue has put the brakes on sites across a quarter of the country.

“The impact of this policy approach is devastating for SMEs, and businesses unable to operate or generate an income are laying off staff, or increasingly closing their doors. We are urging government to act now so that the businesses that remain have a chance of survival.”

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