The Government will continue to fall way short of its house building targets until the support it provides to SME home builders is radically reformed, claims the owner of a regional homebuilder.
Nicky Gordon, of Genesis Homes, is calling on the incoming Government to shake up the restrictive planning system and the minimal funding assistance provided to smaller, regional companies which are seriously prohibiting housing growth across the UK.
He said reducing difficulties for SME housebuilders to gain planning approval would broaden the country’s delivery base and provide a real boost to the industry, helping the country edge closer to the current Government targets of building 300,000 new homes a year – which he said were undeliverable.
He said: “It is clear to everyone involved in the home building industry that SMEs face huge challenges to survive with the current open-ended planning regime, and unless reform occurs the amount of housing developers operating and the number of new homes being built will only dwindle.
“The current planning system is a shambles with thousands of new homes on hold due to its archaic nature.
“The planning consultation process is out of control with statutory response timescales often ignored, with planning applications for significant developments not going in front of committees for many months and sometimes years.
“And these laymen committees consist of individuals with no real knowledge of the industry, meaning some reasons for deferral or refusal can be wild which then results in spiralling costs when progressing the application further.
“That’s not even mentioning the high costs the taxpayer has to stomach when a development has been needlessly refused by committee, only to be overturned and approved at appeal.
“In 2023 alone, this country spent £50 million in awarding costs to developers for appeal applications which should have never been refused in the first place.
“There are no winners in this current, outdated planning system; it just grinds housing and economic growth to a halt. If this country is ever going to get out of the current housing crisis, dramatic changes need to be implemented immediately.”
Mr Gordon wants the next government to:
- Introduce significantly reduced planning fees for SMEs
- Create a a Medium Sites definition in the National Planning Policy Framework up to 150 dwellings to ensure a higher proportion of development is carried out through this route;
- Reduce the number of planning conditions which are causing significant delays;
- Remove duplication between planning systems and building regulations;
- Call time on statutory consultees who do not respond within the prescribed timescale;
- Ensure that a template-based system is in place for Section Agreements;
- Introduce and implement time limits requiring utilities companies to provide their services in a timely manner – and not cause the lengthy delays some currently do;
- Introduce Government-backed insurance bond provision for highways and water infrastructure;
- Make sure there is wider financial support to SME housebuilders.
Mr Gordon added: “More needs to be done by whichever Government gets voted in on July 4, and governmental bodies such as Homes England really need to improve its support to SMEs in terms of pre-development costs and development financing. In doing so, this will give a real injection of positivity and activity into a faltering housing market.
“The Competition and Markets Authority’s report on house building earlier this year identified that such a high percentage of homes produced in the UK are by the largest housebuilders, and this only highlights that serious support is required to developers building 1,000 homes or fewer per year.
“While I acknowledge there are some funding systems currently in place, they don’t go anywhere near enough to provide meaningful support to allow homebuilders to construct higher volumes of much-needed housing or play their part in the risk of pre-development cost.
“The Government needs to put themselves in the shoes of smaller volume housebuilders and ask, ‘how do I make things easier so more companies can grow and can provide much-needed new homes throughout the UK?’ There is a real opportunity for the new Government to broaden the scope for SME developments to breathe new life into the industry.”
