The “State of Play” Report for 2024/25, produced by the Home Builders Federation (HBF), Close Brothers Property Finance and Travis Perkins highlights the challenges tax and regulations play for SME builders.

Should these obstacles be removed, SME builders are confident of achieving a 56% average increase in housing delivery.

Despite the Labour government’s focus on housing delivery, with a key manifesto pledge to deliver 1.5 million homes over the current parliament, industry sentiment has fallen. When asked, almost nine out of 10 SME builders admitted they were less optimistic about their business outlook than before the 2024 General Election.

The State of Play report, in its sixth annual iteration, highlighted the main pain points for SME builders.

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Financial pressures were identified as a key barrier, with 64% of firms citing cumulative visibility pressures and 58% complaining of difficulty obtaining offers for S106 affordable homes.

Despite government pledges to improve planning permission delays, 89% of SME builders complained of local authority capacity as a major constraint.

It is also still expensive to build houses, with labour/supply costs and material costs an issue for 43% and 41% of SME builders.

As such, the HBF is calling on the government to adopt a series of recommendations that would ease bottlenecks on delivery and give more support to SME builders.

The latter would include reducing regulatory burdens, increasing availability of small sites through local plans, and easing CIL and S106 obligations.