In a new report entitled ‘Starting Small to Build More Homes’, LendInvest revealed that an “appalling” four in five small-scale developers have gone out of business since the last housebuilding boom.
The lender suggested that by returning to the same level of market plurality as in 2007, the UK could build 25,000 more homes every year.
Christian Faes, co-founder & CEO of LendInvest (pictured), said: “Decades of successive governments’ under-investment, muted decisions and biased preference for large-scale development have left UK housing in a dire situation.
“It’s meant less employment, less entrepreneurialism and fewer new homes on British streets where large-scale housebuilders didn’t pick up the slack.
- SME builders drop by 80% over 25 years
- 38% of brokers predict future lack of funding for developers
- Two-thirds of SME housebuilders lack land
“If we’re going to encourage people to forge careers in property, they need to know that their businesses will be treated the same as start-ups and scale-ups in other productive sectors.”
The report found that while small-scale housebuilders were responsible for three in eight of the UK’s new homes before 1990, today they deliver only one in eight.
LendInvest recommended that the government apportion a quota of public land for sale only to SMEs and simplify tax burdens to help small businesses reinvest capital into development.
The company also advocated mandating state-backed finance bodies, such as the British Business Bank, to begin or accelerate funding for property SMEs and boosting competition by enlisting the cooperation of relevant ministers.
Christian added: “It’s time to mix small-scale housebuilders into the debate and give them the chance to help get Britain building.”