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Custom and self-build homes have important role in boosting housing numbers

The Custom and Self Build homes sector has the potential to help the Government reach its targets of creating 300,000 new homes per year in England by the middle of the 2020s, it is suggested.

The suggestion from the National Custom and Self Build Association (NaCSBA) comes after the 2019 House Builders’ Survey from the Federation of Master Builders (FMB) shows that the sector is vital for small and medium sized builders.

The latest findings from the 2019 survey indicate that over half of its house builder members have built a home to the plan and specification of a new home owner in the last year. The figure is important as it reflects the close links between the SME market and Custom and Self Build.

The NCSBA says that the SME sector is crucial in delivering more of these kind of homes. ‘We want to see more opportunities that create a level playing field that enables our sector to operate in the same conditions as the large house builders, such as having a Help to Build Equity Loan that mirrors the support that Help to Buy Equity Loan has given to the mass market,’ said Andrew Baddeley-Chappell, NaCSBA chief executive officer.

‘Help to Build Equity Loan would also provide low cost development finance to SME house builders, helping them to flourish and grow. NaCSBA continues to work to help more people achieve their ambition of having a home that reflects their needs, choices and budgets,’ he added.

Each year the FMB conducts its House Builders’ Survey to assess the housing market and the constraints facing the small and medium sized house builders (SME), a sector that’s experienced a dramatic decline.

In 1988 two thirds of all the UK’s homes were built by SME builders, and by 2014 this had dropped to just a third. Since 2007 the number of SME house builders has halved, representing a serious loss capacity.

As part of its efforts to alleviate the housing crisis, the Government wants to see a return of the SME house builders to the market. This chimes with its ambitions for Custom and Self Build to be a valuable source of additional new housing, creating more diverse homes that are built out quicker.

To this end the empirical link between the two sectors strengthens both the National Custom and Self Build Association (NaCSBA) and the FMB in their ambitions and their work to remove barriers to growth, such as access to land and finance.

The survey found that 52% of house builder members have built a new home to the plan and specification of the new home owner in the last year. Of these 42% have built one, 32% have built two, 10% have built four to five and 12% have built six to 10 homes.

The majority, 68%, reported that one of these was on land they obtained for the development, 19% reported two to three, 8% four to five and 3% reported six to 10.

‘If the Government is going to increase both the quantity and quality of new homes a more diverse house building industry is needed. The largest house builders build over 80% of all new homes, and just over 20% are built by SME house builders. This used to be the reverse with SMEs building two thirds of all new homes in the late 1980s,’ said Brian Berry, chief executive of the FMB.

‘What this new research shows is that custom and self-build can help bolster SMEs because, without local builders to help find land, service the plots and to build the houses, Custom and Self Build delivery is much more difficult. This is why the FMB is working closely with NaCSBA to share data and knowledge to help the sector grow,’ he explained.

‘The FMB is urging the Government to support the Custom and Self Build sector, by encouraging prospective home owners to consider building their own home through policy solutions such as the Help to Build Equity Loan scheme idea,’ he added.