State of Play Report 2023/24: Challenges and opportunities facing SME home builders

January 22

8 min read

The SME State of Play report 2023/24 details the findings of one of the most comprehensive surveys of SME housebuilders, conducted by Close Brothers Property Finance, Home Builders Federation (HBF) and Travis Perkins plc.

The report, published Monday 22 January 2024, shows:

*93% of SMEs cite delays in securing planning permission as a major barrier to growth.

*Nine out of 10 (91%) say planning departments in local authorities are under-resourced, which is hindering growth of SME home builders.46% of SME developers say the cost of obtaining planning permission has risen by over 30% in the past three years – even before December’s planning fee rises were introduced.

*Almost three-quarters (72%) claim interest rate rises have been a major obstacle in the past year.

*Just 13% think the Government’s current approach on housing and planning was positive for first time buyers (down from 39% in 2022).

For the fourth consecutive year, the top two major barriers to growth for SME developers are chronic delays in the planning system and under-resourced Local Authority planning departments. Both factors have severely impeded SME’s ability to deliver much-needed housing stock and have been compounded by rapidly increasing associated costs.

The report shows that 46% of SME home builders saw an increase of over 30% in the costs of obtaining planning permission over the past three years. This was before local authorities in England hiked planning application fees by as much as 35% from 6th December 2023.