Commons Sense

House of Commons · Westminster Hall

Small and Medium-sized House Builders — [Mr Lawrence Robertson in the Chair]

10 May 2023 · 8 other contributors · 13,064 words

Opened by Andrew Lewer Con Northampton South

Responding minister: Rachel Maclean

HousingBusiness & Trade

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Andrew Lewer raised concerns about small and medium-sized house builders — [mr lawrence robertson in the chair] in Westminster Hall. A government minister responded.

Key points

  • Mr Andrew Lewer is concerned about the declining home ownership rate among 25 to 34-year-olds in the UK, citing a decrease from 51% in 1989 to 28% in 2019.
  • Lewer identifies three main challenges for small and medium-sized house builders: material costs, financial constraints, and a lack of skilled labour.
  • Lewer calls on the government to support SME house builders by encouraging innovative financing solutions, expediting land registry processes, and reforming planning regulations.

Key requests to Government

Lewer asks for government support to address the cost of materials by encouraging innovative solutions like the escrow agreement launched by Travis Perkins. He also urges the Government to expedite land registry processes and collaborate with DLUHC on addressing sector skills gaps. Additionally, he calls for reforms in planning regulations that could ease burdens on SME developers.

How the debate unfolded

MPs spoke in turn to share their views and ask questions. Here's what each person said.

Opened the debate

Andrew Lewer Con Northampton South

Mr Andrew Lewer is concerned about the declining home ownership among younger people, citing a Lloyds Bank study that shows only 28% of 25 to 34-year-olds owned a house in 2019 compared to 51% in 1989. He also notes the impact of immigration on population growth and the need for new home construction every five minutes to keep up with demand. Lewer identifies three significant issues facing SME house builders: material costs, finance, and access to labour. He highlights specific challenges such as Land Registry delays impacting access to finance and a severe skills shortage in the industry.

Other contributors (8)
  • Chris Stephens SNP Glasgow South West

    Mr Stephens highlighted the challenges faced by small and medium-sized enterprises (SMEs), particularly in relation to cash flow issues due to late payments from larger companies. He noted that Scotland's affordable housing programme has committed £3.5 billion over five years, with £752 million invested in 2023-24.

  • Laurence Robertson Con Glenrothes

    The Chair advised colleagues to be mindful of the timing and requested that Front-Bench speeches start at 14:28.

  • Matthew Pennycook Lab Greenwich and Woolwich

    Matthew Pennycook highlighted the long-term decline of small and medium-sized house builders, noting its negative impact on housing supply, location, quality, and design. He suggested directing Homes England to give greater weight to quality over cost in development appraisal and amending national planning policy to ensure local authorities allocate smaller sites for development. Matthew also pointed out that recent market downturns exacerbate the challenges faced by SME house builders due to high inflation and interest rates.

  • Natalie Elphicke Con Dover

    Natural England's nutrient neutrality policy is responsible for the delay of at least 120,000 new homes with planning permission and an estimated 41,000 more homes not coming forward annually. The policy undermines growth and environmental objectives.

  • Peter Aldous Con Waveney

    Peter Aldous highlighted the importance of a vibrant SME house building sector, which builds well-designed homes on challenging sites and positively impacts local economies. He cited a report showing planning delays and rising costs are major barriers to growth for SME builders, with 68% impacted by nutrient issues. Aldous suggested increasing resources for Homes England and promoting bank responsiveness towards SME builders.

  • Richard Bacon Con South Norfolk

    A constituent who is a small house builder has spent £750,000 of his own money on building a road under a section 106 obligation but cannot finish his work due to nutrient neutrality issues.

  • Siobhain McDonagh Lab Mitcham and Morden

    The MP highlighted the frequent turnover of housing Ministers under the current Government, questioning how effective this instability is for addressing the housing crisis. She argued that large monopolistic firms dominate the market, with the eight largest builders accounting for over 50% of new homes and small builders only 10%. McDonagh also pointed out that 20% of housing associations account for 95% of registered stock in London. She suggested building on unbuilt green belt land within a 10-minute walk from train stations, which could accommodate up to one million new homes. The MP criticised the Help to Buy scheme, stating it primarily benefited high-income earners and inflated house prices.

  • Tim Farron Lib Dem Westmorland and Lonsdale

    Mr. Farron emphasised the importance of SME house builders, highlighting that over 1,500 genuinely affordable social rented properties have been built in his constituency. He expressed concerns about planning rules allowing developers to build more executive houses than needed and criticised the current housing market with a significant imbalance between short-term and long-term rentals. Mr. Farron also noted the impact of second homes on communities and hospitals, urging for changes in planning law to limit them.

Government Response

Rachel Maclean

The Government recognises the importance of SME house builders and is committed to supporting them. Measures include extending development finance with an additional £1.5 billion in the levelling-up home building fund, increasing borrowing availability through the ENABLE Build guarantee scheme, addressing delays in land registry services, and removing barriers to house building through legislative changes such as the Levelling-up and Regeneration Bill. The Government also aims to deliver 300,000 houses a year and supports self-commissioned homes including those that are self-built or community-led.

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