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07 February 2017

Welcome boost for small housebuilders

Communities and Local Government Secretary Sajid Javid gave a statement on the Housing White Paper in the House of Commons, which included plans to provide more financial support for small and medium-sized housebuilders. Mike Cherry, National Chairman at the Federation of Small Businesses (FSB), said:

“We’re pleased to see Government taking steps to make it easier for small housebuilders to compete in order to help solve the housing crisis. The £1 billion short-term loans scheme, first announced in October 2016 is a much needed boost for small housebuilders and will create thousands of new jobs.

“It’s encouraging to see the Government working with the British Business Bank to get more lenders to invest in small house builders. In addition, the White Paper includes measures to help small house builders use the Help to Buy loan scheme, which until now has been primarily the preserve of large developers.

“However, we are concerned about the potential impact of the use-it-or-lose-it measure which could force developers to start building before they are ready. This could create a costly rush and thereby another barrier to entry into the market for small firms. The Government’s delay on Community Infrastructure Levy reform until the Autumn Budget is a particular disappointment. We believe the current levy fails to address the higher costs of building small developments.

“FSB has noted plans to allow local authorities to increase nationally set planning fees by up to 40 per cent. Care should be taken to review this cost hike and make sure it does not put off smaller house builders. The construction industry is arguably one of the toughest sectors for late payments and many are already struggling to compete as they face steep increases in labour costs."