The collapse of the SME construction sector has skewed the market, reducing its output capabilities and squeezing employment opportunities for workers, according to LendInvest.
LendInvest has published its vision for change in a report entitled: ‘Starting Small to Build More Homes: a blueprint for better policymaking for property SME market.’
The report calls on the government to make better use of existing mechanisms to support the smaller end of the construction industry and claims the British Business Bank has yet to allocate funding for property firms.
It also says that the Homes & Communities Agency must lend £56m every month if it wants to hit its target of providing £3bn of housing finance by March 2021.
To improve the status quo, the report makes the following recommendations:
- Mandate state-backed finance bodies, like the British Business Bank and Homes & Communities Agency, to begin or accelerate the provision of funding to property SMEs
- Apportion a quota of public land for sale only to SMEs
- Simplify tax burdens to help property SMEs reinvest capital into business development
- Initiate a strategy to boost competition by enlisting cooperation of the offices of the Housing and Small Business Ministers
Commenting on the report, Christian Faes (pictured), co-founder and chief executive officer at LendInvest, said: “80% of small-scale developers have gone out of business since the last housebuilding boom. That’s an appalling statistic. It’s meant less employment, less entrepreneurialism and fewer new homes on British streets where large-scale housebuilders didn’t pick up the slack.”
He added: “If we’re going to encourage people to forge careers in property, they need to know that their businesses will be treated the same as start-ups and scale-ups in other productive sectors. Failing that, we risk losing another generation of property entrepreneurs.”
John Slaughter, director of external affairs at the Homes Builders Federation that supports the report, said: “Housing supply has increased 52% in the last three years, but the majority of that has come from larger companies and we need to implement measures that can help get SMEs building more too if we are to fully address our national housing requirements.”
Property SME Pocket Living has also backed the findings in the report and its chief executive officer Marc Vlessing said he would like to see measures implemented to simplify the financial and tax burdens placed on small companies. He commented: “Simplifying the tax system, ring-fencing some public sector land for SMEs and making it simpler for them to access capital would all help to unleash the potential of the SME builder.”