Skip to main content

Give small builders a leg up... not just some bad health and safety advice, it is the call from a cross party group of MPs who have released a report today with the support of the Federation of Small Businesses.


The report notes that 30 years ago 12,000 SME building firms built 40% of new homes. Now, 2.500 SMEs build just 12% of the new homes created every year. 

Although every industry consolidates and faces fundamental change there does seem to be an opportunity to encourage the self-employed and smaller firms (still a huge part of the construction supply chain) to bring forward smaller sites.

Advantages to landowners working with smaller developers include leaner supply chains, quicker delivery, and an appetite for smaller and/or more constrained sites. 

The report is very clear on the constraints holding back the sub-sector.  Constraints on finance, availability of sites, and the complexities of the planning system are all factors. 

If you were looking at releasing smaller public sites to builders as one solution, you would need to address constrained Council resource , legislation (including state aid and EU procurement rules), and the need to demonstrate best value. Those all militate against Councils setting up platforms allowing builders to select from a portfolio of under-utilised sites (such as lock up garages or former depots). They contribute towards trends to either package up the sites for large developers (leading to high procurement costs and longer delivery periods), or for the sites to be ignored and left fallow. 

Site constraints are also a problem. There is often an inverse relationship between the size of the site and the awkwardness of the access, use restrictions, and other legal issues affecting it.  An answer (again dependent on resource and commitment) could be to use CPO, appropriation, and other powers to clear the sites.

Inquiry ... calls for a ‘Dedicated Strategy for Small Housebuilders’ which must address the key challenges holding housebuilders back:

Limited access to finance: MPs are calling for a Government backed guarantee on loans to small housebuilders, who are more reliant on financing than bigger builders with large reserves of cash;
Action against businesses that pay their suppliers late: The report asks for a strengthened prompt payment code with a new “three strikes and you’re out” rule targeting big businesses who repeatedly pay late;
More help to increase apprenticeships in the building trade: Large businesses paying the new apprentice levy must prioritise transferring their levy to small, rather than large, businesses, helping to increase apprenticeship opportunities in the building trade;
Remove barriers to building on small sites: Government must use the revised NPPF to streamline the planning process for smaller firms.”