Lack of available land deemed the biggest barrier for local housebuilders

The availability of land is the most important constraint holding back local housebuilders from creating new homes, revealed the Federation of Master Builders’ (FMB) 2021 Housebuilder’s survey.


According to the study, which tracks the experience of SME housebuilders in England, 63% of small builders said that the lack of available and viable land is limiting their ability to provide homes, with 71% reporting that the number of small site opportunities is decreasing.

The study also revealed that 62% of participants are struggling with material shortages, while 53% can’t find the workers they need to build new homes.

In addition, 61% of SMEs feel held back by the planning system, with only 19% feeling a high level of certainty over the outcome of planning applications.

The annual survey, now in its tenth year, also indicates that buyer demand is at a survey high.

However, with just 12% of new housing delivered by SMEs, the FMB says that more must be done to diversify the housebuilding market away from its overreliance on a few volume developers.

The survey’s recommendations for the government, Homes England and local governments to support small builders include:

  • ensuring nationwide compliance with planning guidance that says 10% of housing need should be on sites no larger than one hectare
  • providing greater resource to local planning departments and encouraging better engagement between planning departments and SMEs
  • carefully calibrating the proposed infrastructure levy so it doesn’t affect the viability of the smallest sites and the SME housebuilding sector

Brian Berry, chief executive at the FMB, said: “Demand for new homes is soaring, but the decline of the small housebuilder has hit the capacity, competitiveness and diversity of the housebuilding industry and is slowing down delivery. 

“We will fail to sustainably deliver 300,000 homes a year unless we take action to reverse this trend.

“Builders can’t build if they don’t have the land, and the FMB Housebuilder’s 2021 sends a clear message. 

“It is not all gloom, however; improvements in access to finance are welcome, and recent government commitments to expand access to the self and custom build market will give small builders a boost.”

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