Support Package for SME Housebuilders

In their autumn budget, the government initially pledged support for SME housebuilders with the promise of billions of pounds in guarantees. A £3 billion support package was confirmed recently, with the aim of accelerating housebuilding in the SME sector. And it’s very welcome news. We find out more about the government support, why it’s needed and then take a look at some small to medium-sized housebuilders we have listed on our website, with links to their new build developments.

The Housing Minister Matthew Pennycook confirmed the £3bn support package for SME housebuilders back at the end of November. The hope is that the support by way of housing guarantees will spearhead the delivery of thousands of new homes, boosting economic growth and creating new jobs. The government guarantees will unlock more finance for housebuilders by reducing the risk for lenders, encouraging them to offer more credit to housebuilders.

Financial Challenges Faced by SME Housebuilders

In response to the government announcement about the support for SME housebuilders, the Chief Executive of the Federation of Master Builders (FMB) said, “SME house builders have a crucial role to play in helping to deliver the Government’s ambitious target to build 1.5 million new homes over the next five years. In recent years, small house builders have faced a particularly difficult set of financial challenges. Diversification of the UK’s housing market is essential to deliver the number of homes needed.”

And the financial challenges are wide ranging for SME housebuilders. A lot of these cost pressures are a result of wider economic challenges from high inflation and high interest rates to material shortages. But fundamentally, smaller housebuilders do not have the same level of ‘clout’ as larger, volume housebuilders. The costs associated with land purchase, groundworks and other infrastructure are far more difficult to balance, which leads to SME housebuilders losing out on development opportunities.

Other Hurdles for SME Housebuilders

Several factors have made for tough times for SME housebuilders. Stats from the Federation of Master Builders detail that forty years ago, 40% of homes built were done so by SME housebuilders. Today, this figure is a mere 12%. Why? Successive recessions, Covid, and Brexit have all had an impact, leading to issues around accessing finance, land, and labour. Most SME housebuilders will tell you that the current complicated planning system is a headache to navigate and restricts growth. Additionally, the construction industry is facing a major skills shortage, making it harder for SME housebuilders to recruit competitively. Even the number of apprenticeships offered by SME housebuilders has been falling.

New Government, New Hope

The Labour government has been very vocal about the need for change within the housebuilding industry since they came into power. Even more so to ensure they meet their target of building 1.5 million homes in five years. Getting SME housebuilders building to a greater extent again will be crucial to hitting this target.

Where SME housebuilders are integral to the bigger picture of housebuilding is often overlooked. SME housebuilders don’t deliver large volume developments with hundreds of houses. Their developments are smaller and local to a given area they know well. More often than not, the new homes they build will be on brownfield sites, which can be difficult to work on. While the sites worked on may be smaller, they require no less expertise, effort, or attention. To get SMEs building more homes will only help the larger aim of increasing the country’s housing stock. With policy changes expected and financial support, there is a glimmer of hope for SME housebuilders.

New Build Homes from SME Housebuilders

We don’t just work with leading national housebuilders; we also list homes from smaller, regional housebuilders across the country. Here are some examples of the smaller, regional developments available from SME housebuilders:

If a unique new build home on a smaller development is what you’re looking for, enter your postcode or location to start your search. We’ll bring you all the new homes closest to that location. Start searching here.