Local planning authority delays in securing planning permission or discharging conditions were identified as a key barrier to growth by 93% of SME housebuilder respondents.

A survey from the Home Builders Federation (HBF) on the challenges facing SME housebuilders has found that labour shortages, inefficient planning processes and rocketing material costs are causing significant concerns.

The latest survey assessed a wide set of challenges facing SME housebuilders, such as mortgage availability, economic uncertainty, rising costs and various new government levies and regulations.

While 93% of SME housebuilders cited delays in securing planning permission or discharging conditions as a major barrier to growth, 92% said the lack of resources in Local Planning Authorities(LPAs) also impacted growth – and has increased since 2021 (90%).

The report found that the similarity of results to 2021’s findings was indicative of “a lack of progress by the Government and LPAs in tackling these issues.”

Across all regions of England and Wales surveyed, developers felt that planning constraints were one of the top barriers to growth.

SME housebuilders also voiced their concerns about proposed scrapping of housebuilding targets from Local Authorities, believing that instead of creating a less restricted market, it will remove the bare minimum standards (that many Local Authorities are struggling to deliver already).

When asked whether the cost of obtaining implementable planning permission had changed in the past three years, 91% of respondents believed the cost had increased, with almost half – 48% – agreeing that it had risen by 11- 30%.

Some 79% of respondents identified the supply and cost of materials as a major barrier to increasing housing delivery over the next 12 months, up slightly from 78% last year, and from 20% in 2020.

Rowland Thomas, managing director of Close Brothers Property Finance, said: “The role of SMEs in the housebuilding industry has consistently been underestimated and often ignored when it comes to policy and planning. The reality, however, is that SMEs play a vitally important role in the creation of a healthy housing market.

“As well as the regional economic benefits from employment and supply chains, they are pivotal in bringing new innovation and talent into the industry, with apprentices comprising around 19% of an SME’s workforce – just under 1 in 5 employees. SMEs also develop smaller, often more challenging, development sites on disused land, maximising the use of land across the country.”