Consumer demand for new homes has fallen to lowest level since 2013, according to a new survey by the FMB.
Consumer demand for new homes has fallen by 8% over the last year to its lowest level since 2013. This is according to the latest Federation of Master Builders’ (FMB) House Builders’ Survey, the only annual assessment of small and medium (SME) house builders in England.
Small house builders report current buyer demand (out of 5) at 2.9, down from 3.14 last year, and this is expected to fall further to 2.75 next year.
Brian Berry, Chief Executive of the FMB, said: “Small house builders are starting to see the effects of Brexit uncertainty taking its toll on consumer confidence. Many prospective homeowners are clearly holding off buying until there is more political and economic certainty. Hopefully this is just a short-term pause, and that post-Brexit, demand will pick up once again. If not, and we enter a downturn period, the Government will need to consider how best to support SME housebuilders to avoid many firms leaving the sector.”
Access to land remains the top barrier with almost half (43%) of builders citing this as the top barrier, down from 59% in 2018.
Berry said: “The main barriers facing small house builders have started to ease but they are still present. This is the fifth consecutive year that small house builders have cited lack of access to available and viable land as the number one barrier. Small sites are the bread and butter of SME development, but unfortunately local authorities’ Local Plans are still far too focused on large sites.”
The planning system remains the second major barrier to small house builders, with 42% of firms reported this as a barrier down from 51% in 2018. The main reason noted was the ‘inadequate resourcing of planning departments’.
Berry noted: “The increases in planning fees by 20% in January 2018 were supposed to lead to increased speed and delivery of planning services, but only 3% of our members have seen any improvement since the rise. In fact, 38% of small builders have seen the performance of planning departments worsen. Builders are now paying more for an inferior service which needs to be addressed urgently as part of the Government’s proposals to accelerate the planning system.”
The FMB House Builders’ Survey 2019 received 154 responses from SME firms during August 2019. To view the Survey click here.