While measures designed to boost housebuilding activity were unveiled as part of the Autumn Budget and before that the Housing White Paper, there is uncertainty in the market that the Government will hit its target of increasing housing supply to 300,000 a year by the mid 2020s.
According to RICS UK Construction and Infrastructure Market Survey, only 12% of respondents expressed confidence that the current Government strategy will succeed.
Indeed, there is still a long way to go if housing targets are to be met. According to Government figures, just over 217,000 homes were added to housing supply in England in 2016-17, with over 183,000 of these being new builds. While this is a 15% increase on the previous year, it is still significantly below the levels needed to reach the housing target and shows that more homes need to be built.
In order to try and meet these targets, we need housebuilders of all sizes building. SME housebuilders, who know their local markets and understand local demands, have a vital role to play. This sector was hit hard by the financial crisis and we need to do everything we can to enable them to thrive and grow, including freeing them from the endless red tape and planning costs that can hinder them.
Specialist banks such as Hampshire Trust Bank have emerged due to the demand for funding from sectors, including SME housebuilders, which may have been overlooked by the traditional big banks. It is important for the financial services industry to raise awareness of the funding options now available outside of the High Street.
While there is a long way to go, we believe that if SME housebuilders are given the support they need from the Government and the financial industry they could make all the difference and help ensure enough new homes, of the right sort and in the right locations, are available in the future.
Find out more about our Property Finance division.
Robert Grigg
Managing Director of Property Finance