FMB research reveals that SME builders believe skills shortage will hamper housing delivery.
Small house builders predict that skills shortages in the building industry will hamper housing delivery and will eventually overtake access to finance as a bigger barrier to building new homes, according to new research by the Federation of Master Builders (FMB).
Key results from the FMB’s House Builders’ Survey 2018, an annual assessment of small and medium sized (SME) house builders in England shows that the percentage of SME house builders saying that a shortage of skilled workers is a major barrier to their ability to build more new homes has risen to 44% (up from 42% in 2017). When asked to look ahead over the next three years, more firms cited the skills shortage as a likely barrier to growth than access to finance.
Brian Berry, Chief Executive of the FMB, said: “Nearly half of builders believe the skills shortage is a major barrier to their ability to build new homes. The construction sector is heavily reliant on EU workers with just under one in ten workers in the sector born in the EU. Brexit, coupled with the end of free movement, threatens to further intensify the skills shortages we already face. Given that the UK will leave the EU in less than six months, house builders are understandably concerned that skills shortages could worsen and choke housing delivery.”
A lack of available and viable land tops remains top of the list as the most commonly cited barrier (59%) to increasing housing delivery and almost two-thirds of SME house builders (62%) believe that the number of opportunities for small site development are actually decreasing (up from 54% in 2017).
Nearly half of small house builders (46%) say access to finance is a major barrier to their ability to build more new homes, while more than half (51%) view the planning system as a major constraint on their ability to grow. ‘Inadequate resourcing of planning departments’ was rated as the most significant cause of delay in the planning application process for the third year in a row.
Berry noted: “Our research also shows that the Government must continue to address the issue of access to finance for SME house builders. Although concerns over access to finance have eased slightly in recent years, in part thanks to the Government’s funding schemes such as the Home Building Fund, there is more that can be done. Our research suggests that it is the low percentages of project cost that builders are able to borrow that remain the greatest financial barrier to increasing their levels of house building. This latest research suggests that if firms were able to borrow 80 per cent, rather than the current 60 to 65 per cent of project cost, SME builders would be able to bring forward on average 40 per cent more new homes. Given the ambitious house building targets the Government is working towards, we cannot afford to ignore such a chance to significantly increase housing delivery.”
The FMB House Builders’ Survey 2018 received 116 responses from SME firms during August 2018. To view the Survey click here www.fmb.org.uk/House-Builders-Survey-2018