According to data from the Insolvency Service obtained by accountancy firm Price Bailey under the Freedom of Information Act, this was a 78 per cent rise over a three-year period.
Some 207 housebuilding firms went under in 2016 while 253 filed for insolvency in 2017. In 2018, 312 housebuilding firms went bust.
Price Bailey said although larger listed housebuilders boosted by the Help to Buy scheme have posted record profits in recent years, SME housebuilders had been pressurised by factors including stagnant house prices and rising material and labour costs.
The loss of smaller housebuilders will impact the ability of the housebuilding industry to deliver new homes to meet the country’s housing needs, the firm said.
Paul Pittman, partner at Price Bailey, said: “Housebuilding in England reached a 30-year high in 2019 but the collapse of a record number of smaller developers threatens to undermine progress.
“Subdued activity and falling prices as people defer purchases due to coronavirus and Brexit uncertainty will continue to exact a heavy toll on the smaller housebuilders who do not have the financial cushion of their listed rivals.”
“Small housebuilders used to deliver a much higher proportion of new homes but their contribution to new housing stock continues to dwindle. They are often much better placed to develop small parcels of land on brownfield sites, which larger developers tend to overlook,” Pittman added.
“As the housebuilding market becomes increasingly dominated by a few large companies, competition is being stifled, and buyers have less choice.”