Event Summary
The Role of SME Housebuilders in Delivering the Nation’s Housing | Photos + summary
If we are serious about improving the quality of homes delivered and getting close to meeting Labour’s 1.5m target, SMEs must be allowed to play a bigger role in the UK’s housing market. That was the main takeaway from a summit on the nation’s housing sector held last week.
Speakers from across the industry spent the morning discussing what needs to be done to support SMEs and ensure they are part of the conversation when it comes to ramping up housing delivery.
They agreed that small-scale developments are essential to building the housing stock we need now and in the future, as well as diversifying consumer choice.
The event was sponsored by VM Finance, Hope Architects, Mansell Building Solutions, and Trowers & Hamlins and chaired by Place North West deputy editor Dan Whelan.
Time for action
Salford City Mayor Paul Dennett kicked off the event by highlighting the need for “a good dose of systemic thinking” to solve the housing crisis.
Dennett described SMEs as critical to doing so and added that if the industry is to reach the government’s lofty housing targets, it needs “all hands to the pump”.
He added: “Too many people do not have that solid base, a place to call home. As an industry, we need to think more agile, more systemically, and start thinking upstream.”
Paul Dennett said the industry needed ‘all hands to the pump’, to address the housing crisis. Credit: PNW
Addressing small site decline
Less than 10% of UK housing is built by SMEs. The first discussion of the morning considered what the government can do to address the decline in smaller site development.
Emily Williams, a director at Savills, pointed to Savills’ Land Matters research, noting that housing types have become homogenous and stated the industry is “not delivering variety”. The research also indicated a drop off in planning approvals for smaller sites, in line with a fall in the number of smaller developers active in the market.
Jonathon Bloor, managing director at Richborough, said the planning system is a major blocker to housing delivery. He called it “unhealthy” and said it had taken one of his clients years and more than £500,000 to get planning permission for a 50-home scheme.
Bloor said that more small plots need to be allocated for development by SMEs, which can diversify locations and effectively use infill sites.
He added: “To get to the 1.5m target you need lots of similar [smaller] sites to get consent together quickly.”
At a local level
Much has been made of Labour’s planning reforms in recent months and Sam Stafford, planning director, Home Builders Federation, said the government should be commended for its approach.
Analysing the state’s attitude towards housing delivery, he said Green Belt reforms, namely the introduction of grey belt, was “the most significant legal change in my lifetime” adding that Labour was “bold” with the policy.
However, he conceded that the planning system is “too reactive” and said more local authority certainty is needed to “de-risk” sites to make them more tempting to SME housebuilders who fear ever-rising costs.
Brian Burt, head of development finance for the North West and the Midlands at Homes England, said the agency can help plug viability gaps by acting as an “interventionist for SMEs”, able to provide debt funding for those unable to get loans from the bank.
Another way Homes England helps SMEs is by selling land with planning permission, offering a more risk-free option for SMEs, he said.
However, he conceded that land availability and raw material costs remain serious viability challenges for smaller firms, he added that “utility instalment represents a unique challenge” for SMEs, and Section 106 agreements can cause a “waterfall” effect of spiralling costs.
Sam Stafford said the government should be praised for its ‘bold’ planning reforms. Credit: PNW
Panel discussion: Responding to the challenge
Panellists agreed that, in order to affect the change required to create a more functional and productive housing market, the private sector would have to move away from traditional ways of thinking and working.
To this end, housing experts on a panel delving into how the industry needs to adapt were asked what their housing heaven and hell would look like.
Angela Mansell, managing director at Mansell Building Solutions, said her heaven would be a world in which the housebuilder delivery ecosystem is transparent.
She said this would lead to collaboration morphing into partnership, which would help the supply chain mobilize and deliver on targets.
A failure to address the issues currently holding the sector back would result in industry is having the same conversation in five years time. This, Mansell said, is here idea of housing hell.
Andrew Evans, deputy chief executive at VM Finance, said that poorly thought out design and a lack of consideration for the end user contribute to his idea of housebuilding hell. He added that the 1.5m homes target could be detrimental in the future if, in the rush to deliver, the impacts of development are not properly considered.
He added that failing to think long-term and consider sustainability could mean having to redo schemes.
Heaven will need the industry to take a pause and make sure projects are fit for purpose and provide spaces that inspire and improve lives, he said.
Phil Cooper, director at Hope Architects, said heaven for housing is one where density does not equal bad design. More schemes that cater to the way people live would be “a game-changer in terms of density, delivery, and quality.” He continued: “I think that’s a really good place for SME developers to be.”
However, he said that we aren’t far off from being in housing hell already, describing the current model of buying and owning homes as “not sustainable”.
“The housing market is stagnating on a flawed model,” Cooper added.
Angela Mansell and Andrew Evans gave their ideas of housing heaven and hell. Credit: PNW
Chris Williamson, president-elect, RIBA, said his ideal is one where high-density, spacious, and attractive buildings with parks and gardens are available to all. He suggested the solution is not always large-scale and high-tech. He argued that high-density, mid-rise areas like Kensington are old and still work effectively.
Williamson added that urban design needs to think ahead and be timeless. Milton Keynes and its car-centric layout is an example of such a failure to look to the future, he said.
Construction corner
If SMEs are to play a bigger role in delivering the nation’s housing, more stability is required in the construction sector. The final panel of the morning discussed the challenges the sector is facing and how it is navigating them.
David Saville, Caddick Construction’s North West managing director, said that build costs were a significant viability barrier for SMEs, and are restricting them from building affordable houses. He called on local authorities to help close the viability gap and bring the process forward. Upfront costs can be “scary”, and SMEs need assistance to thrive, he added.
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Jeremy Whittle, managing director, Tyson Construction, identified the concern of the skills shortage and the perceived unattractiveness of the construction industry to younger people. To adapt to this environment, SMEs will need to offer modern training, and practically apply modern technologies, including AI, to enhance worker’s performance and output.
Whittle remained optimistic that the future will present huge opportunities for small to medium-sized enterprises, particularly those who are moving to take advantage of innovative methods such as modular construction.
What’s next?
Join Place North at our upcoming events
Thursday 27 February – North West Emerging Development Hotspots 2025
Thursday 6 March – North West Rental Market 2025: Exploring the worlds of BTR, PRS, and PBSA
Thursday 25 March – Yorkshire Emerging Development Hotspots 2025
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