Housing Ministry pledges to improve builder competition and support smaller firms

The promise was introduced following an overhaul of the MHCLG departmental plan – just six months after the last edition was launched.

MHCLG’s top priority in the plan is to “Deliver the homes the country needs” with targets of building a million homes by the end of 2020 and half a million more by the end of 2022.

And it believes increased competition and productivity in the construction sector, including greater use of smaller builders and more innovative methods, will help it get there.

The way forward

To do this the MHCLG highlighted several key initiatives, two of which focus on the builders market:

• Improve productivity and competition in the housing market, opening it up to smaller builders and those who embrace innovative and efficient methods while supporting the work of Department for Education (DfE) and Department for Business, Energy and Industrial Strategy (BEIS) to improve the provision of construction skills; and
• Provide Home Building Fund short-term loan finance targeted at SMEs, custom-builders and innovators; and new guarantees to support housebuilding, including SMEs and purpose-built rented housing.

The independent review of build out, chaired by Sir Oliver Letwin, has already highlighted concerns regarding the control major housebuilders have in the market and why it takes them so long to build homes once they have gained planning permission.

Lenders and the wider mortgage industry have been calling for government to prioritise smaller builders for more than a year and it appears this has now been formally recognised.

Other means raised by the government to achieve its housing targets were:

• Deliver the reforms proposed in our Housing White Paper and at Autumn Budget to ensure the planning system supports our housing supply objectives;
• Deliver the Housing Infrastructure Fund grant funding to provide infrastructure which unlocks homes in areas where housing need is greatest and deliver Home Building Fund long-term loan funding for infrastructure and large sites;
• Support local authorities and housing associations to increase the supply of affordable homes. Provide grant funding in the Affordable Homes Programme and lift Housing Revenue Account borrowing caps for councils in areas of high affordability pressure;
• Boost availability of land in the right places for homes and ensure that better use is made of underused land;
• Make the most of surplus land already in public ownership: release surplus central government land and support local authorities to release their land;
• Support ambitious local authorities to bring forward land to create new settlements;
• Provide funding to enable Homes England to acquire, assemble and de-risk sites and accelerate building of homes on small, stalled sites;
• Increase home ownership and housing supply through the Help to Buy Equity Loan scheme;
• Encourage the best practice in delivering high quality design to underpin the creation of great places to live.

For more on the MHCLG’s seven objectives within its departmental plan that will direct its ongoing work.