Delays in securing planning permission are “barrier to growth” while council planning teams are under-resourced”, SME housebuilders say

Nine out of ten Small and Medium Enterprise (SME) housebuilders (93%) say delays in securing planning permission are a major barrier to growth, research conducted by Travis Perkins, the Home Builders Federation (HBF) and Close Brothers Property Finance has found.

Their SME State of Play report, published this week (22 January), claims that “the overburdened planning system is putting SME home builders under enormous strain”.

The report also “highlights the impact rising interest rates have had on smaller home building businesses and comes amidst a broader collapse in home building”.

Key findings in the report also include:

• 91% of the 305 respondents say planning departments in local authorities are under-resourced.
• 46% of SME developers say the cost of obtaining planning permission has risen by more than 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).

Stewart Baseley, Executive Chairman of the Home Builders Federation, said: “The house building industry faces some major barriers to delivery and all indicators now show sharp falls in supply. SMEs in particular are unable to manage the delays caused by the collapsing of the planning system and the lack of capacity in planning departments.

"The increasingly onerous policy and regulatory environment has seen the number of SME builders plummet in recent years, and we urgently need to see a reversal of the anti-development approach by Government or more companies will disappear.

"SMEs are vital to the industry’s ability to deliver the homes we need and play a vital role in training and communities across the country.”

Harry Rodd