Rising interest rates see mortgage availability become a major issue
The planning system is the biggest obstacle to delivery for small and medium-sized housebuilders, according to a survey by the Federation of Master Builders.
More than half (55%) of local builders asked for this year’s edition of the trade body’s long-running House Builders’ Survey said planning issues was holding them back from building new homes.
Respondents said inadequate resourcing of planning departments was the most significant cause of delay, followed by inadequate communication by planning officers.
Only 12% said they had a high or very high degree of certainty in the outcome of a planning application.
The survey, published this morning, also saw 51% of builders identify mortgage availability as an obstacle, a steep rise which reflects major increases in interest rates over the past year.
The biggest obstacles after planning and mortgage availability were the availability of land (48%), material costs (43%) and access to finance (42%).
More than three-in-five respondents said the number of small site opportunities was decreasing, though this was down from 82% last year.
However, members said that material costs were becoming less of an issue and indicated that the number of them that would identify it as a major obstacle would fall to 23% over the next three years.
Buyer demand was at its lowest level since the survey began recording it in 2015, with builders given demand an average score of 1.99 out of five.
Nearly a quarter (24%) said they were planning to grow their on-site workforce over the next year, but the majority (57%) said they would keep the workforce roughly the same size.