Land scarcity limits the supply of new housing


New figures released by the Federation of Builders (FMB) reveal that land availability is the most important constraint preventing local builders from building new homes.

The FMB’s 2021 Homebuilder Survey – the only survey of its kind to track the experience of small and medium-sized (SME) home builders in England – shows that in 2021:

  • 63% of small builders are limited in their ability to build the houses we need by the lack of available and viable land;
  • 62% are struggling with equipment shortages;
  • 61% feel held back by the planning system; and
  • 53% cannot find the workers they need to build their house.

The annual survey, now in its tenth year, also indicates that buyer demand is at a high level. Echoing the behavior change brought on by the pandemic, with homeowners seeking more space or moving out of cities, builders are reporting demand for new homes is booming.

However, with only 12% of new homes delivered by small builders, up from 40% in the 1980s, more needs to be done to diversify the homebuilding market and avoid its over-reliance on a smaller one. number of promoters.

The main lessons from the 2021 BKW Homebuilder Survey for government, local government and Homes England to support small builders are:

  • Ensure nationwide compliance with planning guidelines which state that 10% of housing needs should be on sites no larger than one hectare.
  • Provide more resources to local planning departments and encourage better engagement between planning departments and SMEs.
  • Carefully calibrate the proposed infrastructure tax so that it does not affect the viability of smaller sites and the SME housing construction sector.

Brian Berry, Managing Director of FMB, said: “Demand for new homes is skyrocketing, but the decline of the small home builder has affected the capacity, competitiveness and diversity of the home construction industry, and is slowing delivery. We will not be able to deliver 300,000 homes a year on a sustainable basis unless we take action to reverse this trend.

“Builders can’t build if they don’t have the land, and the FMB House Builders’ Survey 2021 sends a clear message. With 71% of small builders reporting that the number of small site opportunities is declining, and only 19% feeling a high level of certainty about the outcome of planning requests, these constraints are stubbornly changing.

“It’s not all gloomy, however. Improvements in access to finance are welcome, and recent government commitments to expand market access for free-standing and custom construction will give small builders a boost.

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