The Federation of Master Builders’ (FMB) annual House Builders’ Survey aims to build a clear picture of the experience of small and medium-sized (SME) house builders in England.

In 2022, the availability and viability of land is the most prominent barrier (62%) to SME house builders’ ability to build more homes and the vast majority (82%) of respondents say that the number of small site opportunities is decreasing. This shows a lot more work is needed to be done by Government and local authorities to ensure SME house builders are supported.

Unfortunately, to add to the woes of small builders the market has shown clear signs of contraction. This is also reflected in the workforce with a shortage of skilled labour growing as a constraint and fewer members growing their workforce

The reports main findings are:

Main constraints on supply

  • The ‘lack of available and viable land’ is the most cited constraint (62% of respondents) on SME house builders’ ability to build more homes.
  • This is closely followed by ‘the planning system’ at 60%.
  • Shortage of skills enters the top three at 47%.
  • Restricted mortgage availability being cited at the fourth biggest issue (by 38% of responders) with 48% thinking this will get worse over the next three years.

Access to finance

  • ‘Interest rates charged on new loans’ was rated as the most significant finance related issue, well ahead of any other issue.
  • Self-build/Custom contracts have topped the list as the most popular source of funding for a project (50%) replacing last year’s private equity which has fallen third behind high street banks.
  • 41% of respondents stated that there are sites that they have an interest in that are stalled for finance-related reasons.

Small sites and land availability

  • 82% of respondents report that the number of small site opportunities is decreasing, up from 71% last year and only 3% say that the number is increasing.
  • 25% of respondents believe that small sites are being taken more seriously by planners and local authorities, which is up from 11% in 2021.

Planning application process

  • Respondents rated ‘Inadequate resourcing of planning departments’ as the most significant cause of delay in the planning application process, followed by ‘Inadequate communication by planning officers.
  • Respondents rated ‘cost imposed by delays in the system’ as the most significant cause of additional cost in the planning process.
  • Only 11% of respondents feel either a ‘very high’ or ‘quite high’ degree of certainty over the outcome of planning applications; 47% feel they have ‘quite low’ or ‘very levels’ of certainty; and 40% say they feel medium levels of certainty.

Workforce and skills

  • 25% of respondents are planning to grow their on-site workforce over the next year, against just 6% who are planning to decrease their on-site workforce.
  • Fewer firms say that they are employing apprentices this year (40% compared to 46% in 2021). However, many more firms have up-skilled workers (46% compared to 36% in 2021).

You can download the full report here.