A new survey conducted by the Home Builders Federation (HBF) and Close Brothers Property Finance has suggested that small and medium enterprise (SME) housebuilders face difficult times ahead.
The survey revealed that two thirds of SME housebuilders (65%) say their growth projections are down due to COVID-19 and with 76% of SMEs using Help to Buy, the new regional thresholds are expected to be a major barrier.
Planning delays and securing permission remain a major barrier to housing delivery over the next 12 months, according to 83% of respondents.
Coronavirus forcing 40% of SMEs to halt plans to sell
Frank Pennal, chief executive of Close Brothers Property Finance, said: “The threat to SME housebuilders following the COVID-19 pandemic is clear, and we now have to act to reverse the decline of this vitally important part of the housing market.
“Not only do SME housebuilders provide a training ground for young apprentices and trainees, they are the lifeblood of regional property markets and safeguard diversity of design, skills and craftmanship within the industry.
“This research underlines the need to support and protect SME housebuilders, which have consistently demonstrated their value when it comes to economic growth and directly supporting the local communities and micro-markets in which they operate.”
SME developers have had varying degrees of success in accessing the government’s financial support measures for businesses introduced in the wake of the coronavirus pandemic, according to the research.
Some are reportedly facing numerous challenges including delays, inconsistent approaches from lenders and a refusal by some to lend to the real estate sector, in their attempts to access financial support.
Just over half of the respondents (53%) have tried to access supports through CBILS and of these, only 44% of respondents had been successful.
Development finance was rated as the lowest barrier to growth by SME housebuilders with 41% not considering this to be a barrier to growth.
Stewart Baseley, executive chairman at HBF, added: “As we look to boost housing supply post the coronavirus lockdown it is vital we support SME builders such that they can play their part.
“Increased bureaucracy and regulation and a harsh operating environment has seen the number of SME builders plummet in recent decades.
“Government needs to work with industry to develop policies that allow SMEs to grow.
“Doing so will increase housing supply, create jobs and stimulate economies across the country.”