Experts have highlighted that Britain needs to rely on the SME market to make-up the shortfall in housing across the country. However, the lender fears this may not happen without significant change to planning laws.
Noel Meredith (pictured), executive director of United Trust Bank and head of the development finance division, said small developers needed more certainty and speedier resolution in the planning system if they were to scale up delivery of new housing.
Too much bureaucracy, unnecessary delays and onerous levels of developer contributions can make SME developers reluctant to take on smaller and often more challenging projects.
While developers have embraced Help to Buy, more radical steps are needed, said Meredith.
“Help to Buy will benefit a relatively small percentage of homebuyers. There are more radical steps which could be taken to boost the building of new homes for all types of purchasers across the country.”
He added: “Unfortunately, the planning system continues to place unnecessary obstacles in the way of SME developers.
“They feel that the planning process is still a lottery in terms of approvals and this has a detrimental impact on their ability to invest in new schemes.
“The SME developer sector has been in decline for the last 20 years but a radical overhaul of the planning system could help to rejuvenate an essential element of the UK’s house building capacity,” he added.