SME developers hit the most by planning system

SME developers hit the most by planning system



Development finance brokers have ranked the planning system as the most important factor affecting the construction industry’s inability to build one million homes by 2020..


Development finance brokers have ranked the planning system as the most important factor affecting the construction industry’s inability to build one million homes by 2020.

The survey, conducted by United Trust Bank, asked brokers to place seven key factors most likely to hinder the industry from hitting the government’s target.

In order of importance they were: the planning system, the availability of suitable building land, the stability of the UK economy, the availability of development finance, the availability of construction workers, base rates remaining below 3% and the availability of construction materials.

Noel Meredith, Executive Director of United Trust Bank, said the result did not surprise him as it reflected feedback he had been hearing from developers.

“The problems do seem to disproportionately affect SME builders trying to progress smaller developments with the local authorities’ stretched planning teams giving more attention to larger schemes,” said Noel.

“Whilst it’s hard to criticise the logic, the government must recognise that a substantial proportion of the one million home target will be delivered by SME developers and should therefore ensure that the planning system helps rather than hinders them.”

Noel added that it was promising to see the government take a significant step in the right direction by including a proposal to permanently relax permitted development rules in its most recent Housing and Planning Bill.

“UTB have funded several successful office to residential conversion schemes made possible by the changes to permitted development rights and they have proven to be popular amongst developers and purchasers,” said Noel.

Noel said one interesting point made in the survey, is that even a substantial increase in interest rates was considered less of an issue than the availability of development finance and suitable construction workers.

“There is considerable confidence amongst those who work within the construction and development finance sectors that the UK property market will continue its recovery,” added Noel.

“There’s a sense that if the right homes are allowed to be built and offered at reasonable prices there will be buyers for them, even if mortgages become a little more expensive.”

Noel concluded by saying housing output could be increased by encouraging more initiatives on the supply side, maintaining access to development funding and ensuring that the industry had the necessary skilled workforce.

“If the number of new homes built meets demand, prices will regulate themselves and we’ll have a healthy property market fit for a growing population,” said Noel



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