Some 93% of respondents to the survey by the Home Builders Federation (HBF), Close Brothers Property Finance and Travis Perkins, cited delays in securing planning permission or discharging conditions as significant obstacles to growth, while 92% agreed a lack of resources in Local Planning Authorities (LPAs) was a weighty problem (up from 90% in 2021).

Over the past two years, the report has primarily looked at the impact of the pandemic on businesses, but this year it analysed a wider array of challenges that SMEs faced, including increasing costs, economic uncertainty, mortgage availability and various new government levies and regulations.

The supply and cost of materials was considered a momentous hurdle by 79% of SME developers — up slightly from 78% in 2021, but a noteworthy uptick from the 20% reported in 2020.

The cost of energy also featured as an issue, with 62% believing it will be a considerable obstruction to their business growth over the next year.

Rowland Thomas, managing director at Close Brothers (pictured above), commented: “The role of SMEs in the housebuilding industry has consistently been underestimated and often ignored when it comes to policy and planning.

“SMEs play a vitally important role in the creation of a healthy housing market.

“They also develop smaller, often more challenging, development sites on disused land, maximising the use of land across the country.

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“We hope to educate central and local government, planners, and the wider population about the benefits these businesses bring to local economies and in reducing the national housing shortage.

“The consistent erosion of confidence in the government’s approach to planning and housing for housebuilders as a whole, and especially SMEs and first-time buyers, gives cause for concern.”

When respondents were asked if they were satisfied that the government’s attitude to planning and housing was positive for SME housebuilders, 92% said no.

Some of the top suggestions SME builders would like the government to act on include:

• ensuring planning departments are adequately resourced and funded
• bringing forward a greater number of small sites in local development plans
• simplifying the planning process for small sites
• making LPAs more accountable for poor service/delays
• resolving the nutrient and water neutrality issues
• making development finance easier to access on terms that allow builders to recycle their equity more quickly

Stuart Baseley, executive chairman at HBF, added: “Things are undeniably much tougher to navigate for all developers but, in particular, SMEs.

“This country needs to build more homes, and that is something that is not going to change.

“If we want housing supply to continue to increase, SMEs need to be supported.

“I hope that the issues and recommendations raised in this report will help to focus minds in Westminster and necessitate the changes required to allow SMEs to prosper.”