The research, which has surveyed SME housebuilders annually for five years, has identified several issues that potentially put the government’s 1.5 million housing target at risk.

Produced by Close Brothers Property Finance, the Home Builders Federation, and Travis Perkins, the 2024/25 report is based on quantitative and qualitative data from 242 respondents.

It found that SME housebuilders have complained over planning delays, rising costs, and NIMBYism as frustrating their progress.

With 51% of respondents reporting year-long waiting periods for planning permission, 56% have experienced a 30% hike in the cost of securing this approval.

The implementation of biodiversity net gain requirements, and nutrient and/or water neutrality restrictions were also flagged as a challenge.

Some 90% of SME housebuilders reported the biodiversity net gain regime as a barrier to growth, with only 4% believing local authorities have the resources or capacity to help them achieve a 10% net gain.

Elsewhere, 78% of respondents identified NIMBYism (or local and/or political opposition to new development) as a major barrier of housing delivery.

These issues mean two-thirds of SME housebuilders have declared it is more difficult to be a small developer now than it was five years ago.

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Phil Hooper, CEO at Close Brothers Property Finance, welcomed the “pro-building rhetoric” from the government, but said more needed to be done to back up these ambitions.

“In the five years in which we’ve produced the ‘State of Play’ report, we’ve had a global pandemic, eight housing ministers, and 14 consecutive interest rate rises,” added Phil.

“Mandatory housing targets have been scrapped and subsequently reintroduced, and uncertainty about nutrient neutrality laws, which still haven’t been resolved, has held up delivery of 160,000 new homes.

“It’s little surprise then that two-thirds of SME homebuilders say it is harder to be an SME housebuilder now than it was half a decade ago.”

Neil Jefferson, CEO at the Home Builders Federation, added that the government needs to do more from both a planning permission perspective and supporting the housing market itself.

“Ensuring local authority planning departments have sufficient capacity to process applications efficiently is key,” said Neil.

“Government needs to do more to support prospective buyers, in particular young people, to access suitable mortgage finance.

“The suppressed level of demand reduces the industry’s ability to invest in new sites and its supply chain and so accelerate the delivery of private and affordable homes.”