One of the UK’s online mortgage lenders has called on the Government to do more alleviate the challenges and obstacles facing smaller property developers at a time when more new homes are needed.
The call comes at a time when the number of smaller and medium sized house builders has fallen. Defined as those who build 100 units or fewer, their numbers have fallen from 12,200 in 1988 to 2,400 in 2014.
According to LendInvest more should be done to encourage such SMEs and in a submission to the Communities and Local Government Committee’s Inquiry into capacity in the home building industry, it says there is a real opportunity to reinvigorate the market.
The lender says that it is not enough to set ambitious house building targets without addressing the challenges in the sector that are preventing developers from delivering the targets that the Government aspires to achieve.
Instead, it suggest that measures should be taken to address the shortages in land, opportunities for finance and the lack of skills in the sector to truly get Britain building and makes a number of recommendations to boost the numbers of small scale builders in the UK, and so begin to address the housing shortage.
It says that the Government should take action to ensure that land is not unnecessarily banked and that larger developers who do not develop land in their stock sell it on to SMEs who will develop the land swiftly.
It also suggests increased scrutiny on the land market, including requiring the publication of data on land pricing, option agreements and ownership and more consideration for SMEs over major house builders in bids to develop land released from public ownership.
LendInvest says the Government should explore state backed funding schemes to provide businesses like LendInvest with more capital to lend to SMEs and the recommendations would put SME property development at the heart of the industrial strategy.
It also recommends that the Government should commit to and act upon the funding understood by industry to have been earmarked by government for SME development projects.
There is also more support needed for industry initiatives to develop skills for property developers and incentives to make property development an attractive entrepreneurial opportunity as well as working with SME developers to make it easy to plan and develop property.
