Supply shortage to go on as planning stifles house building goals

Planning delays, labour shortages and the surging price of building materials are combining to sharply cut the number of new homes being constructed.

One of the most comprehensive surveys of Small and Medium Enterprise housebuilders in the UK - conducted by the Home Builders Federation, Close Brothers Property Finance and Travis Perkins - has found:

- planning remains a significant barrier to increasing housing delivery over the next 12 months, with 94 per cent of SME housebuilders seeing delays in securing planning permission or discharging conditions stifling housing supply;

- the situation worsening next year because of widespread local elections in May;

- some 78 per cent of housebuilders also seeing the supply and cost of materials as a major barrier to delivery (up from just 20 per cent last year); and

- 59 per cent seeing the supply and cost of labour as a major barrier (up from 19 per cent last year).

The survey claims the construction industry is, and will continue to be, a key driver of economic recovery and it says it is critical that SME builders are able to play their part in this recovery and acreate a more diverse sector, with a thriving local and regional network of home building firms.

 Frank Pennal - chief executive of Close Brothers Property Finance - comments: “Developing homes takes months and years and while some of these issues might only be short term, they risk leaving a lasting legacy on the provision of new homes. It is important for the industry to work together to overcome these issues, encouraging young talent into the sector, reforming the planning system and securing sustainable supply chains.”

Stewart Baseley, executive chairman of the Home Builders Federation, adds: “Recent decades has seen a collapse in SME builders numbers and the survey shows the considerable challenges the sector continues to face. Every single SME I speak to is suffering badly from delays to the planning process.  

“SMEs are literally having to put their businesses on hold whilst local authorities delay the start of construction as their planning departments don’t have adequate capacity to process applications effectively. Allied to concerns on materials and staff, planning delays threatens the demise of even more SME builders.”